A series of recombinant plasmid vectors containing hepatitis B virus (HBV) DNA sequences was constructed to study the biosynthesis of the hepatitis B virus surface antigen (HBsAg) RNA and to locate transcriptional control elements involved in the regulation of the S and pre-S DNA sequences. We examined the transcription of the HBsAg gene in permanent cell lines that were developed by transfecting with recombinant vectors containing HBV sequences and the neomycin gene followed by G418 selection. We further defined the promoter activities upstream of and within the pre-S sequences using the assayable chloramphenicol acetyltransferase gene. Results obtained from S1 nuclease digestion and primer extension suggest that HBsAg transcripts are initiated at multiple sites in the pre-S region and from a site upstream of the pre-S region. Chloramphenicol acetyltransferase assays indicate that DNA sequences within and upstream of the pre-S region contain promoter activities and that the "TATA" sequence-containing promoter and the internal promoter show similar levels of activities in CV-1 cells and several other cell lines tested.