Naturally occurring deletions within the human hepatitis B virus (HBV) preS2 region have frequently been identified in patients with hepatocellular carcinoma (HCC), while chronic carriers without cirrhosis and HCC contain no detectable preS2 deletion variants. We have characterized two different preS2 internal deletion variants from two patients. In addition to several weak phenotypes, our study revealed three unexpected strong phenotypes: (1) a paradoxical "hypermodification" phenomenon was observed with significantly increased size heterogeneity and molecular weights of the secreted middle (M) envelope proteins containing a preS2 internal deletion. This phenomenon was observed in transient transfection with a human hepatoma Huh7 cell line as well as in stable transfection with a rodent hepatoma cell line 7777. (2) A significantly increased intracellular accumulation of all three envelope proteins (large, middle, and small) was detected by both Western blot analysis and immunofluorescence microscopy. (3) The middle envelope proteins with a preS2 internal deletion were not recognized in vitro by a putative neutralizing antiserum, suggesting that these variants can evade immune recognition in vivo. To our knowledge, this is the first identification and characterization of the M deletion variant protein in HBV natural infection.