We have cloned the X gene (HBx) and the HBc antigen (HBc Ag) gene of human hepatitis B virus (HBV) in Escherichia coli as fusion products with beta-galactosidase. Both HBV genes are expressed in E. coli strain CSR 603. Expression is detected by u.v. irradiation of the bacteria, metabolic labelling and electrophoresis of the labelled extracts on SDS-polyacrylamide gels. The HBc Ag protein produced in bacteria can be recognised by anti-HBc sera and peptides derived from the protein are also recognised by anti-HBe sera. The HBx protein is recognised by some, but not all, sera which are anti-HBe positive. HBx Ag is also recognised by a woodchuck antibody similar to anti-HBe (anti-WHe). These results constitute the first proof that the open reading frame X is a true viral gene and is expressed during HBV (and WHV) infection and that an HBx/anti-HBx system, which may have important biological implications, can exist in parallel with the classic HBe/anti-HBe system.