Occult hepatitis B virus (HBV) infection is defined as persistence of HBV DNA in liver tissues, with or without detectability of HBV DNA in the serum, in individuals with negative serum HBV surface antigen (HBsAg). Despite accumulating evidence suggesting its important clinical roles, the molecular and virological basis of occult hepatitis B remains unclear. In an attempt to establish new hepatoma cell lines, we achieved a new cell line derived from a hepatoma patient with chronic hepatitis C virus (HCV) and occult HBV infection. Characterization of this cell line revealed previously unrecognized properties. Two novel human hepatoma cell lines were established. Hep-Y1 was derived from a male hepatoma patient negative for HCV and HBV infection. Hep-Y2 was derived from a female hepatoma patient suffering from chronic HCV and occult HBV infection. Morphological, cytogenetic and functional studies were performed. Permissiveness to HBV infection was assessed. Both cell lines showed typical hepatocyte-like morphology under phase-contrast and electron microscopy and expressed alpha-fetoprotein, albumin, transferrin, and aldolase B. Cytogenetic analysis revealed extensive chromosomal anomalies. An extrachromosomal form of HBV DNA persisted in the nuclear fraction of Hep-Y2 cells, while no HBsAg was detected in the medium. After treated with 2% dimethyl sulfoxide, both cell lines were permissive for exogenous HBV infection with transient elevation of the replication intermediates in the cytosol with detectable viral antigens by immunoflurescence analysis. In conclusions, we established two new hepatoma cell lines including one from occult HBV infection (Hep-Y2). Both cell lines were permissive for HBV infection. Additionally, Hep-Y2 cells carried persistent extrachromosomal HBV DNA in the nuclei. This cell line could serve as a useful tool to establish the molecular and virological basis of occult HBV infection.