Exposure of female hepatitis B virus transgenic mice of lineage 50-4, which display liver injury secondary to overexpression of the gene for the large envelope polypeptide of hepatitis B virus, to the hepatocarcinogens aflatoxin and diethylnitrosamine produced more rapid and extensive evidence of nodule formation and oval cell proliferation, as well as the development of adenomas and primary hepatocellular carcinomas, than was seen in transgenic mice not exposed to carcinogens. Adult mice are known to be resistant to the effects of aflatoxin or diethylnitrosamine, and the livers of carcinogen-treated nontransgenic littermate controls were essentially normal. By the time of sacrifice (15 mo), 20 adenomas and 2 primary hepatocellular carcinomas were found in 26 transgenic mice given aflatoxin and 8 adenomas and 2 primary hepatocellular carcinomas were seen in the 8 mice exposed to diethylnitrosamine, but no adenomas or carcinomas were identified in the 10 transgenic mice not exposed to carcinogens. These results suggest that the chronic liver damage and repair caused by overexpression of the hepatitis B virus large envelope polypeptide in the hepatocytes of the transgenic lineage 50-4 act synergistically with chemical hepatocarcinogens to produce neoplasia of the liver.