The hepatitis B virus (HBV) X protein (HBx) is a transcriptional transactivator that has been implicated in the development of HBV-related hepatocellular carcinoma. Mutations in the HBx open reading frame have been reported, but their general impact on the biological function of HBx remains unknown. To address this issue, we comparatively analyzed the structures and biological functions of HBx sequences isolated from sera and from tumor and nontumor tissues of patients with a HBV-related hepatocellular carcinoma. In addition to the HBx sequences derived from free HBV genomes, HBx from HBV integrants was also obtained from the tumor tissues by use of a HBx-Alu PCR-based approach. Sequence analysis showed that the HBx sequences derived from tumor tissues (6 of 7), particularly those isolated from HBV integrants (4 of 4), contained a deletion in the distal COOH-terminal region. Interestingly, most of the COOH-terminally truncated HBx sequences obtained from tumor tissues, in contrast to the full-length HBx isolated from the sera and nontumor tissues, lost their transcriptional activity and their inhibitory effects on cell proliferation and transformation. Importantly, although full-length HBx suppressed the focus formation induced by the cooperation of ras and myc oncogenes in primary rat embryo fibroblasts, COOH-terminally truncated HBx enhanced the transforming ability of ras and myc. Finally, by analyzing the artificial mutants, we were able to more precisely map the functional domains located at the COOH-terminal of HBx. Taken together, our results suggest a key role for the HBx COOH-terminal end in controlling cell proliferation, viability, and transformation. This study further supports the hypothesis that natural HBx mutants might be selected in tumor tissues and play a role in hepatocarcinogenesis by modifying the biological functions of HBx.