Constructs expressing the core, surface, X, or polymerase proteins of hepatitis B virus were transfected into human cells. In transient assays, only the polymerase inhibited the responses to interferons alpha and gamma (IFN-alpha and -gamma). Stable expression of the polymerase was achieved in the cell line 2fTGH, which carries an IFN-inducible marker gene, by growth under conditions that select for inhibition of the response to IFN-alpha, but the clones grew poorly. When expressed alone, the terminal protein domain of the polymerase gene inhibited the response to IFN-alpha and the reverse transcriptase plus RNase H domains appeared to be toxic. Clones of cells expressing terminal protein alone, selected for the loss of response to IFN-alpha, grew normally and had no detectable response to IFN-alpha, IFN-gamma, or double-stranded RNA. Binding of IFN-alpha to these cells was not impaired but did not lead to activation of the E alpha subunit of the IFN-induced transcription factor E. These observations are of potential importance in relation to the pathogenesis of chronic hepatitis B virus infection and the resistance of such infection to IFN-alpha therapy.