In vitro transcription of hepatitis B virus DNA (HBV DNA) was studied using nuclear extracts of human hepatoma cell lines. RNA polymerase II-dependent run-off transcription of pre-S mRNA under the control of pre-S1 promoter was observed in nuclear extracts obtained from HepG2 and PLC/PRF/5 cells, and the efficiencies in these extracts were significantly higher than those in nuclear extracts of non-liver cells such as HeLa, Molt-4, and Ehrlich. Analysis of run-off transcripts by the pre-S1 promoter, using deletion mutants of HBV DNA as templates and synthetic oligonucleotides as competitors, showed that hepatocyte nuclear factor 1 was necessary for initiation of in vitro transcription of pre-S mRNA. The run-off transcript of pregenome RNA was also detected and its initiation site was determined. Nuclear extracts of not only hepatoma cells but non-liver cells were active in transcription of pregenome RNA in vitro. However, run-off transcripts of S mRNA and X mRNA were not observed in this system. These results suggest that there were some differences between the mechanisms of HBV DNA transcription in vitro and in vivo. This in vitro transcription system will be useful for clarifying the mechanism regulating transcription of HBV DNA since the biochemical and functional characteristics of the nuclear factors can readily be analyzed.