Two transgenic mice were produced by microinjection of the entire hepatitis B virus (HBV) genome as a 3.2-kilobase EcoRI DNA fragment into one-cell embryos. Each animal contained a single, unique locus of HBV sequence. One founder animal, G7, contained a partially deleted HBV genome lacking both putative HBV surface antigen (HBsAg) promoters. The other animal, G26, contained greater-than-genome-length HBV sequences organized as a partial head-to-tail dimer. Both transgenic animals transmitted the HBV sequences in a Mendelian fashion, and all subsequent transgenic animals had detectable HBsAg in the serum. Expression of HBV sequences in tissues from G7- and G26-derived mice showed preferential expression of the 2.1-kilobase HBsAg RNA transcript in liver and kidney tissues by Northern (RNA) blot analysis. These data are consistent with the notion that HBV DNA contains cis-acting regulatory sequences which are responsible for the predominant expression of HBsAg transcripts in the liver and kidney of transgenic mice.