Transgenic mice that overproduce the hepatitis B virus large envelope polypeptide and accumulate toxic quantities of hepatitis B surface antigen (HBsAg) within the hepatocyte develop severe, prolonged hepatocellular injury that initiates a programmed response within the liver, characterized by inflammation, regenerative hyperplasia, transcriptional deregulation, and aneuploidy. This response inexorably progresses to neoplasia. The incidence of hepatocellular carcinoma in this model corresponds to the frequency, severity, and age of onset of liver cell injury, which itself corresponds to the intrahepatic concentration of HBsAg and is influenced by genetic background and sex. Thus, the inappropriate expression of a single structural viral gene is sufficient to cause malignant transformation in this model. These results suggest that severe, prolonged cellular injury induces a preneoplastic proliferative response that fosters secondary genetic events that program the cell for unrestrained growth.