Hepatitis B virus (HBV) causes acute and chronic liver injury, and integration of HBV DNA is considered to be an important pathogenic determinant for hepatocarcinogenesis and tumor development. Transforming growth factor alpha (TGF-alpha) drastically accelerates hepatocarcinogenesis when it is overexpressed in TGF-alpha transgenic mice (C. Jhappan et al., Cell, 61: 1137-1146, 1990). In HBV-infected patients, hepatocellular carcinoma (HCC) cells show elevated expression of TGF-alpha (C. C. Hsia et al., J. Med. Virol., 43: 216-221, 1994), the mechanism for which, however, has not been clarified yet. We here show that preS1, a part of the HBV large surface protein, carries a transcriptional transactivation domain and activates the transcription of the TGF-alpha gene by 2-fold in human HCC HuH6 cells. The responsive elements are restricted to the 315-bp segment of the proximal TGF-alpha promoter (-373 to -59). Furthermore, the expression of TGF-alpha was markedly increased in permanently preS1-producing HuH6 transformants. The crucial role for HBV preS1 in hepatocarcinogenesis and tumor development through transactivation of the TGF-alpha gene may give us new insight into the understanding of pathogenesis and therapy of viral hepatocarcinogenesis.