Chronic infection with hepatitis B virus is associated with a high incidence of liver diseases, including hepatocellular carcinoma. Hepatitis-B-virus-encoded X antigen (HBxAg) stimulates virus gene expression and replication, which may be important for the establishment and maintenance of the chronic carrier state. Integration of viral DNA encoding HBxAg during chronic infection results in increased X antigen expression. HBxAg overexpression may alter signal transduction pathways important for the regulation of cell growth during hepatocellular regeneration. The finding that HBxAg binds to and inactivates negative growth-regulatory molecules, such as the tumor suppressor p53, suggests additional ways that HBxAg may act in hepatocarcinogenesis. HBxAg may also stimulate the expression of positive growth regulators, such as insulin-like growth factor II and the insulin-like growth factor I receptor. The finding that HBxAg may compromise DNA repair and that it may effect the normal turnover of growth-regulatory molecules in the proteasome may also contribute to its carcinogenic properties. Hence, HBxAg may contribute to the pathogenesis of chronic infection and development of hepatocellular carcinoma in a variety of ways.