The surface antigen (S) gene promoter, one of the major hepatitis B virus (HBV) promoters, directs the synthesis of a 2.1 kb mRNA which encodes the preS2 and S polypeptides. The preS2/S promoter does not contain a classical TATA box, and transcription regulation of the preS2/S gene has not been fully elucidated. We analysed two regions involved in preS2/S gene transcription of the HBV adw subtype: the diverged TATA box and a putative initiator element. We demonstrated sequence specific promoter activity of the putative TATA-like sequences in the preS2/S gene promoter (-25 to -32 bp). Using end labeled synthetic oligonucleotides we observed specific binding of nuclear extracts to the diverged TATA sequence, that was significantly reduced using a mutated oligonucleotide. Specific binding of yeast TBP to the diverged TATA sequence was shown which was increased in the mutant containing a classical TATA box. We analysed the proposed initiator (Inr) sequence of the preS2/S promoter region (-13 to -16 bp). Deletion of the inr element markedly reduced promoter activity as assessed by CAT expression. Gel shift assays showed specific binding of nuclear extracts to wild type but not to mutant Inr. Expression studies with double mutants of the diverged TATA and the Inr element established that both elements are active in transcription regulation.