Hepatitis B virus genome-transfected HepG2 cells (2.2.15 cells) inoculated into nude mice produced tumors within 2-8 wk. Dane particles, hepatitis B virus deoxyribonucleic acid polymerase activity, hepatitis B surface antigen, and hepatitis B e antigen were detected in the serum, and 36% of mice developed antibodies to hepatitis B core antigen. In the tumors, hepatitis B surface, core, and e antigens were observed by electron microscopy and immunoenzymatic techniques. In-situ hybridization and Southern blot analysis showed hepatitis B virus deoxyribonucleic acid in the tumor. Tumors could be propagated by injection of minced tumor tissue or of a tumor-derived cell line. Liver of tumor-bearing mice as well as sera and tissues of mice inoculated with control cell lines did not show hepatitis B virus genome or viral markers. Tumors induced by both 2.2.15 and nontransfected HepG2 cells exhibited myc oncogene protein and various hepatoma-associated antigens (alpha-fetoprotein, alpha-1-antitrypsin, alpha-1-antichymotrypsin, carcinoembryonic antigen, cytokeratin), suggesting that viral formation does not interfere with expression of these antigens. This experimental model will be helpful to study the effect of drugs on in-vivo hepatitis B virus replication and viral antigen expression.