The X protein of the hepatitis B virus transactivates various cellular and viral promoters and enhancers. In this study, wild-type and mutants of the X gene, including the point mutations at codons 130 (AAG-->ATG, lysin-->methionine) and 131 (GTC-->ATC, valine-->isoleucine), commonly found in patients with human hepatocellular carcinoma (HCC), or deletions encompassing the same region, were cloned and inserted into expression vectors. Functional analysis of the mutants of the X gene was performed on the long terminal repeat of the Rous sarcoma virus in a transient transfection assay. A transactivating function was observed in the vector containing point mutations at codons 130 and 131 at the same level as that of wild-type X gene. Two constructs, each containing a different type of 8-nucleotide deletion mutant (codons 128-130 or 130-132,) dramatically lost their transactivating function. These findings suggest that the transactivating function is not necessarily associated with the development of HCC, and that not only transactivation by the X gene but also the mutation-enhanced oncogenic potential of the gene products could contribute to hepatocarcinogenesis.