The mechanism which is responsible for the association of chronic hepatitis B virus (HBV) infection with hepatocellular carcinoma (HCC) is poorly understood. The protein encoded by the HBV X-gene (HBx) has been identified as potentially oncogenic. HBx is a promiscuous indirect trans-activator of a wide range of cellular and viral cis-elements and may disrupt the maintenance of genomic integrity by inhibiting p53 function and binding a putative DNA repair protein (XAP-1). In this report, we show that there is preferential binding of recombinant HBx to damaged DNA through an association with nuclear proteins. We have used the transcriptional activation by HBx of the beta-actin promoter of a beta-galactosidase reporter cassette to label cultured Chang liver cells expressing HBx. We demonstrate that cells expressing HBx are sensitised to the lethal effects of low dose ultraviolet irradiation. These data indicate that HBx interferes with liver cell DNA repair by binding damaged DNA and may predispose to the accumulation of potentially lethal or carcinogenic mutations.