To examine the transforming potential of the X gene product of hepatitis B virus (HBV), the X-gene-containing region (referred to as the HBx region) was introduced into mouse NIH3T3 cells. Each transformed cell line expressed X-coding mRNA at a different level. A positive correlation was found between the level of X-coding mRNA and the saturation density of the cells. The HBx-transformed cell lines exhibited X protein production and tumor formation in nude mice. The function of HBV in oncogenesis may involve the continuous expression of the X-gene-coded product in the HBV DNA-integrated cells.