We have reported previously that the hepatitis B virus oncoprotein, HBx, can bind to the C terminus of p53 and inhibit several critical p53-mediated cellular processes, including DNA sequence-specific binding, transcriptional transactivation, and apoptosis. Recognizing the importance of p53-mediated apoptosis for maintaining homeostasis and preventing neoplastic transformation, here we further examine the physical interaction between HBx and p53 as well as the functional consequences of this association. In vitro binding studies indicate that the ayw and adr viral subtypes of HBx bind similar amounts of glutathione S-transferase-p53 with the distal C terminus of HBx (from residues 111 to 154) being critical for this interaction. Using a microinjection technique, we show that this same C-terminal region of HBx is necessary for sequestering p53 in the cytoplasm and abrogating p53-mediated apoptosis. The transcriptional transactivation domain of HBx also maps to its C terminus; however, a comparison of the ability of full-length and truncated HBx protein to abrogate p53-induced apoptosis versus transactivate simian virus 40- or human nitric oxide synthase-2 promoter-driven reporter constructs indicates that these two functional properties are distinct and thus may contribute to hepatocarcinogenesis differently. Collectively, our data indicate that the distal C-terminal domain of HBx, independent of its transactivation activity, complexes with p53 in the cytoplasm, partially preventing its nuclear entry and ability to induce apoptosis. These pathobiological effects of HBx may contribute to the early stages of hepatocellular carcinogenesis.