To determine whether hepatitis B virus (HBV) regulates the expression of the human fl-interferon gene, a series of recombinant bovine papilloma virus plasmids containing the human interferon gene and various fragments of the HBV genome were constructed and used to transform C127 cells, a murine fibroblast line. Analysis of the DNA from transformed C127 cells indicated that the interferon gene was intact and that the plasmids replicated as stable multicopy elements. The 1828-base-pair BamHI HBV DNA fragment containing the core antigen gene, but not the 2755-base-pairBgl II HBV DNA fragment encoding both the surface antigen and the X antigen, suppressed the production of human fl-interferon. No effect by any of the recombinant plasmids on the synthesis of murine interferon was detected. The suppression of human f-interferon by HBV occurs via a trans-acting factor.A frameshift mutation within the HBV core gene alleviates the inhibitory activity; thus we infer that the core protein is this factor or is crucially associated with this activity. was cloned into the same BamHI site of the plasmid pdBPV-1, which had one of the two BamHI sites destroyed (19). The resulting plasmids, pBHC and pBHS (Fig. 1), were used in further plasmid constructions. The plasmid pIFR containing the human Pinterferon gene as a 1.6-kilobase (kb) EcoRI-HindIII fragment (20) was linearized by digestion with EcoRI and the EcoRI ends were converted to HindIII ends. Following digestion with HindIII, the resulting 1.6-kb HindIII fragment containing the human 8-interferon gene was isolated and inserted into the HindIII site of (i) pdBPV-1, (it) pBHS, and (iii) pBHC, resulting in the formation of pBI, pBHSI, and pBHCI, respectively (Fig. 1).An insertion mutation at the Taq I site (mp 2014) that is within the HBV core antigen gene was created by digesting circularized 1828-bp BamHI HBV DNA fragments with Taq I. The linearized fragment was filled-in, ligated, and then cleaved with BamHI. The resulting BamHI HBV DNA fragment then was cloned into the BamHI site of pBI, yielding pBIHCdTaqI. The insertion mutation resulted in the destruction ofthe Taq I site in the HBV core antigen gene and in a shift in the open reading frame.Cell Cultures and DNA Transfections. Murine C127 fibroblasts were grown as described (20). One day before transfection, 8 x 104 cells were plated in each well of a 24-well plate; the cells were refed with fresh medium 4 hr before transfection. C127 cells were transfected by the calcium phosphate precipitation technique (21) with 0.2 Ag of total plasmid DNA that included 50 ng of a plasmid containing the neomycin-resistance gene. Eight hours after transfection, cells were diluted and G418 (600 ,ug/ml) was added. After 14-21 days, well-separated foci were picked and stable transformants were grown to confluence in the presence of G418.Interferon Induction and Assay. Induction of interferon by poly(I)-poly(C) in C127 cells that had been confluent for 4 days was performed as described (20). Uninduced cells were treated in t...