The X gene product of the human hepatitis B virus (HBx) is a transcriptional activator of various viral and cellular genes. We recently have determined that the production of tumor necrosis factor‐α (TNF‐α) by HBV‐infected hepatocytes is transcriptionally up‐regulated by HBx, involving nuclear factor of activated T cells (NF‐AT)‐dependent activation of the TNF‐α gene promoter. Here we show that HBx activates NF‐AT by a cyclosporin A‐sensitive mechanism involving dephosphorylation and nuclear translocation of the transcription factor. Luciferase gene expression assays demonstrated that HBx transactivates transcription through NF‐AT‐binding sites and activates a Gal4–NF‐AT chimeric protein. DNA–protein interaction assays revealed that HBx induces the formation of NF‐AT‐containing DNA‐binding complexes. Immunofluorescence analysis demonstrated that HBx induces the nuclear translocation of NF‐AT, which can be blocked by the immunosuppressive drug cyclosporin A. Furthermore, immunoblot analysis showed that the HBx‐induced activation and translocation of NF‐AT are associated with its dephosphorylation. Thus, HBx may play a relevant role in the intrahepatic inflammatory processes by inducing locally the expression of cytokines that are regulated by NF‐AT.