To investigate the hepatitis B virus (HBV) DNA status in the liver when hepatocellular carcinoma (HCC) has developed, 35 paired nontumorous and tumorous liver tissues from 27 hepatitis B surface antigen (HBsAg)-seropositive and 8 HBsAg-negative patients with HCC were studied by Southern blot analysis. The hybridization patterns of HBV DNA were different in the nontumor and tumor parts in 26 (96.3%) of the 27 HBsAg-positive patients. In the nontumor parts, integration of HBV DNA into the host genome was significantly less when compared to the tumor parts (15/27 vs. 25/27, P less than 0.05), whereas free replicative viral forms were significantly more frequent (17/27 vs. 7/27). The integrated HBV DNA in the nontumor parts showed discrete band patterns in the majority of cases (13/15). Hepatitis B e antigen (HBeAg) was significantly associated with the expression of free replicative forms of HBV DNA in the tumor tissues. An integrated HBV DNA sequence was detected in the tumor part of one HBsAg-negative patient, but not in her nontumor counterpart. Our observation that discrete integrated HBV DNAs are present in the nontumor part, representing subclinical clonal expansion that precedes the development of HCC, suggests the risk of future new tumor growth from these cell clones.