The baculovirus Autographa californica nuclear polyhedrosis virus was used as an expression vector to produce hepatitis B virus surface antigen with and without the pre-S domain. The S gene product was expressed as both fusion and nonfusion polypeptides. No difference was observed in the posttranslational modification of the fusion and nonfusion polypeptides. The S proteins were not secreted into the medium but were inserted into the endoplasmic reticulum, glycosylated, and partially extruded into the lumen of the endoplasmic reticulum as 22-nm lipoprotein particles. The oligosaccharide chains on the insect cell-derived S protein were of the N-linked high-mannose form, in contrast to the complex-type oligosaccharides detected on plasma-derived hepatitis B virus surface antigen. The pre-S-S polypeptides were inserted into the endoplasmic reticulum, glycosylated, and modified by fatty acid acylation with myristic acid. A procedure was developed to purify the S protein from cellular membranes by using detergent extraction and immunoaffinity chromatography. The purified S protein was in the form of protein-detergent micelles and was highly antigenic and immunogenic.