Ground glass hepatocytes (GGHs) are the historic hallmarks for the hepatocytes in the late and non-replicative stages of hepatitis B virus (HBV) infection. We have identified type I and type II GGHs that contain two mutant types of large HBV surface antigens (HBsAg) with deletions over the pre-S1 and pre-S2 regions, respectively. These pre-S mutant HBVsAg accumulate in endoplasmic reticulum (ER), resulting in strong ER stress. Type II GGHs often appear in hepatic nodules in the late phases of HBV infection and proliferate in clusters, suggesting that these mutant pre-S1/S2 HBsAg may be involved in HBV-related hepatocarcinogenesis, associated with ER stress. In this study, we investigated the potential genomic instability imposed by pre-S mutant HBsAg. Based on the analysis of comet assays, we found that the pre-S1 and pre-S2 mutant HBsAg caused oxidative stress and DNA damage. The DNA repair gene ogg1 was greatly induced by over-expression of pre-S mutant HBsAg. Induction of the DNA repair gene ogg1 was also detected in the pre-S2 HBsAg transgenic mice, as well as the type II GGHs from patients with hepatocellular carcinoma, strongly suggesting that the pre-S mutant HBsAg contributes to the oxidative DNA damage to hepatocytes. In addition, the mutation rates in the X-linked hprt gene were enhanced in mouse hepatoma ML1-4a cells, which constitutively expressed the pre-S1/S2 HBsAg. These results indicate that pre-S1/S2 mutant HBsAg, which make up GGHs, induce oxidative DNA damage and mutations in hepatocytes in the late stages of HBV infection.