Chronic HBV infection remains a major clinical problem with estimates of as many as 500 million HBV chronic carriers in the world for whom, to date, there is no reliable treatment. The consequences of chronic HBV infection can include debilitating chronic active hepatitis, liver cirrhosis, and primary hepatocellular carcinoma which are major causes of mortality. HBV replicates by reverse transcription of the viral pregenomic RNA encoded by the HBV DNA genome. Consequently, transcription of the viral genome is an essential step in virus replication. Therefore, the long term objective is to understand the mechanisms controlling the coordinate and differential regulation of HBV transcription, and their influence on viral biosynthesis in vivo, so that critical steps in the viral transcription process might be identified and targeted for disruption by antiviral agents. Based on the knowledge of the transcription factors which are important in regulating HBV transcription in transient transfection analysis using reporter gene constructs, the levels of transcription from the large and major surface antigen promoters will be altered in the context of the complete viral genome and the effects on viral transcripts, antigen production, replication, and viral biosynthesis will be examined. Specifically, in an attempt to reproduce the effect of liver regeneration on viral replication observed in HBV transgenic mice, the effect of eliminating the binding of HNF1 to the large surface antigen promoter will be examined for reduced 2.4kb RNA synthesis and the appearance of specific replication intermediates, in particular non- encapsidated protein-free RC and CCC HBV DNA. Mice will be examined for the integration of these HBV DNA replication intermediates into the host chromosomal DNA, an event associated with the development of primary hepatocellular carcinoma in man. The suggestion that the liver-specific expression of the HBV 2.1kb transcript observed in vivo but absent in cell culture is due to HNF3 interacting with the HNF3 binding site located in the major surface antigen promoter will be examined. The favored mechanism accounting for this difference assumes that HNF3 is required to alter the local chromatin structure of the promoter in vivo to permit the proximal promoter region to be occupied by ubiquitous transcription factors which subsequently activate transcription from the promoter. This mechanism will be tested directly by functional and in vivo footprinting analysis.