The integrated form of hepatitis B virus (HBV) in the human hepatoma cell line huH2-2 and its cellular counterpart sequence have been cloned and analyzed. Blot hybridization analysis and nucleotide sequencing indicated that a single copy of the 1895-base-pair (bp) subgenomic region of HBV DNA, spanning from the middle of pre-S to the end of gene X, was integrated and flanked by the 12-bp directly repeating cellular sequences. A comparison of the sequencing data with that of the cellular counterpart DNA indicated the absence of deletion and rearrangement in the cellular flanking DNA following integration of the 1895-bp HBV DNA, except for generation of the 12-bp direct repeat at the virus-cell junction. A possible model for the mechanism of HBV integration is proposed.