The hepatitis B virus enhancer plays an important role in transcription regulation of the viral genes in a liver-specific manner. In animal models a homologous element seems to be involved in activation of cellular oncogenes and tumorigenesis. Previously, the enhancer was divided into several functional domains, whereby each one seemed to be required for optimal transcription activity. To gain more information on the mode of action of these elements and their role in viral genome, we mutagenized the individual enhancer elements and analyzed their functions in three different experimental systems. All show that the NF1b motif of the enhancer plays a central role, with the most dramatic results obtained from the cell-free in vitro transcription assay. Furthermore, an intact viral genome mutated at the NF1b site is a poor template for the synthesis of the 3.5-kb pregenomic RNA. These data are rather unexpected, given the ubiquitous appearance of this factor. On the other hand, our findings are in agreement with a large number of recently reported cases in which NF1 seems to determine tissue-specific expression of a wide range of cellular and viral promoters.