Three lines of transgenic mice carrying hepatitis B virus (HBV) DNA were produced. In a pSHB1BB transgenic mouse carrying one copy of BamHI fragment of HBV with a deletion of Bg/II-Bg/II fragment, no RNA transcription was observed. Transgenic mice that had integrated either one or three tandem copies of HBV DNA produced RNA in various tissues except liver. However, neither initiation nor termination of transcription occurred at the correct place. Hepatitis B surface antigen and hepatitis B e antigen were not detectable in these transgenic mice. HBV DNA was methylated at all CCGG sequences, which might have resulted in aberrant RNA production. In two out of five transgenic mice HBV DNA was integrated into the Y chromosome. Although the frequency is unusually high, the mechanism is not known yet.