We have used a transient expression system to examine the influence of the hepatitis B virus enhancer on the transcription of the hepatitis B virus surface antigen (HBsAg) gene. This enhancer is located 3' to HBsAg coding sequences but is contained within the mature HBsAg transcripts. Removal of the enhancer resulted in a significant reduction in HBsAg gene expression in liver cells. By using an in vitro nuclear run-on assay, this effect was determined to be at the level of transcription. We have further noted that HBsAg expression can be restored by the reinsertion of the enhancer sequences in the enhancerless vector. However, this reconstitution of HBsAg expression appears to depend on location of the enhancer with regard to the HBsAg promoters.