Chronic inflammation can be a major risk factor for cancer development and may contribute to the high worldwide incidence of hepatocellular carcinoma (HCC). Cyclooxygenase-2 (COX-2) is known to be an important mediator of inflammatory responses; however, its link to hepatitis B virus (HBV)-mediated inflammatory responses has not been established. Here, we demonstrate that the expression of COX-2 mRNA and protein was significantly elevated in cells transfected by HBV replicon but not in cells transfected by HBV genome lacking the HBx gene. Notably, COX-2 induction was correlated with HBx's ability to increase reactive oxygen species (ROS) levels. Consistently with this, antioxidant treatment and ectopic expression of manganese superoxide dismutase or catalase completely abolished COX-2 induction. Interestingly, a mitochondria localization-defective mutant of HBx (HBx(Delta 68-117)) neither increased intracellular ROS levels nor induced COX-2 expression. HBx(68-117), which encodes only amino acids 68-117 and is sufficient for mitochondria localization, increased ROS levels but did not induce COX-2 expression. Similarly, HBx targeting to the outer membrane of mitochondria (Mito-HBx) increased ROS but also failed to increase COX-2 expression, suggesting that other cytoplasmic signaling pathways are involved in HBx-mediated COX-2 induction. Indeed, inhibition of cytoplasmic calcium signaling by cyclosporine A, blocking mitochondrial permeability transition pore, and herbimycin, and inhibition of calcium-dependent tyrosine kinase suppressed HBV-mediated COX-2 induction. Thus, the data indicate that both mitochondrial ROS and cytoplasmic calcium signaling are necessary for the COX-2 induction. Our studies revealed a pathophysiological link between HBV infection and hepatic inflammation, and this chain of events might contribute to early steps in HBV-associated liver carcinogenesis.