Chronic infection with the hepatitis B virus (HBV) is a major risk factor for development of hepatocellular carcinoma (HCC). The pathogenesis of cancer in HBV infection has been extensively analyzed, and multiple factors appear to play a role. A major factor is chronic inflammation and the effects of cytokines in the development of fibrosis and liver cell proliferation. Also important is the role of integration of HBV DNA into host cellular DNA, which, in some situations, acts to disrupt or promote expression of cellular genes that are important in cell growth and differentiation. In addition, expression of HBV proteins may have a direct effect on cellular functions, and some of these gene products can favor malignant transformation. Several HBV genes have been found in infected tissues more frequently than others, including truncated pre-S2/S, hepatitis B X gene, and a novel spliced transcript of HBV, referred to as the hepatitis B spliced protein. The proteins expressed from these integrated genes have been shown to have intracellular activities that may account for their association with HCC, including effects on cellular growth and apoptosis. Finally, some patients with HCC have no detectable hepatitis B surface antigen in serum but do have low levels of HBV DNA in serum and integrated molecules of HBV DNA in tissue. Occult HBV infection may account for a proportion of cases of HCC that occur in patients without serologic markers for hepatitis B and C and may be a cofactor in HCC in patients with chronic hepatitis C who have coexistent occult HBV infection.