The recent finding of c-myc activation by insertion of woodchuck hepatitis virus DNA in two independent hepatocellular carcinoma has given support to the hypothesis that integration of hepatitis B viruses into the host genome, observed in most human and woodchuck liver tumours, might contribute to oncogenesis. We report here high frequency of woodchuck hepatitis virus DNA integrations in two newly identified N-myc genes: N-myc1, the homologue of known mammalian N-myc genes, and N-myc2, an intronless 'complementary DNA gene' or 'retroposon' that has retained extensive coding and transforming homology with N-myc. N-myc2 is totally silent in normal liver, but is overexpressed without genetic rearrangements in most liver tumours. Moreover, viral integrations occur within either N-myc1 or N-myc2 in about 20% of the tumours, giving rise to chimaeric messenger RNAs in which the 3' untranslated region of N-myc was replaced by woodchuck hepatitis virus sequences encompassing the viral enhancer. Insertion sites were clustered in a short sequence of the third exon that coincides with a retroviral integration hotspot within the murine N-myc gene, recently described in T-cell lymphomas induced by murine leukaemia virus. Thus, comparable mechanisms, leading to deregulated expression of N-myc genes, may operate in the development of tumours induced either by hepatitis virus or by nonacute retroviruses in rodents. Activation of myc genes by insertion of hepadnavirus DNA now emerges as a common event in the genesis of woodchuck hepatocellular carcinoma.