We produced transgenic mice by microinjecting a partially duplicated copies of hepatitis B virus (HBV) gene into fertilized eggs of C57BL/6 mice. One mouse was a high producer of HBV surface antigen (HBsAg) and HBV e antigen (HBeAg) in the serum. All offspring carrying HBV DNA were positive for both antigens in the serum. The HBV DNA was expressed in liver- and kidney-specific manner. The normal process of HBV replication, including the packaging of the pregenome 3.5-kb RNA into a nucleocapsid, the reverse-transcription of the complete minus strand DNA, and the release of Dane particles into the serum before the completion of synthesis of plus strand, occurred in the liver of these transgenic mice. These results suggest that the species specificity of HBV infection is not due to the inability to replicate in nonnatural host but to the lack of receptors or factors needed for virus adsorption and internalization. The founder mouse is now 19 months of age but shows no clinical or pathological change, suggesting that HBV itself is not cytopathic.