It has recently been shown that hepatitis B virus (HBV) contains a transcriptional enhancer element. In order to determine whether this enhancer responds to glucocorticoids, a series of derivatives of plasmid pA10CAT2 was constructed containing the HBV enhancer and variable lengths of further upstream sequences. Transient expression of chloramphenicol acetyltransferase (CAT) was determined after introduction of these plasmids into PLC/PRF/5, Hep 3B, Hep G2, HeLa, and mouse L cells. Highest CAT activity was noted in the human hepatocellular carcinoma line PLC/PRF/5, which contains integrated HBV DNA sequences. Dexamethasone augmented CAT expression in all cell lines tested with 40% of maximal induction at 10 nM and maximum stimulation (3- to 8-fold) at 1 microM dexamethasone. Dexamethasone augmentation of CAT expression was observed only when constructs contained HBV DNA sequences residing upstream to map position 735 from the EcoRI site. This indicates that the glucocorticoid-responsive region is distinct from the previously defined HBV enhancer sequence located at map position 1080-1234. These studies suggest that HBV DNA contains a glucocorticoid-responsive element, which may mediate expression of HBV genes in infected mammalian cells.