The hepatitis B virus HBx protein is a promiscuous transactivator implicated in the development of hepatocellular carcinoma. The ectopic expression of HBx fails to transform both primary and immortalized rodent cells, but rather induces apoptosis. Furthermore, most transgenic mice harboring HBx do not develop liver tumors. Thus, it remains unclear whether and how HBx contributes to oncogenesis. Here, we show that HBx collaborates with activated H-ras to transform immortalized rodent cells. Indeed, REF52 cells transfected by both HBx and activated H-ras were morphologically transformed and were able to grow in soft agar. Remarkably, nude mice injected with REF52 cells transfected by both HBx and activated H-ras developed tumors, whereas the mice injected with REF52 cells transfected by either gene alone did not. Thus, we concluded that HBx could contribute to neoplastic transformation of cells in collaboration with other oncogenes, such as H-ras, that renders cells to overcome the HBx-mediated apoptosis. Further, we found that HBx mediated apoptosis was suppressed by activated H-ras through activation of the phosphatidylinositol-3 kinase and Akt pathway. Data presented here firmly established the oncogenic potential of HBx during multistage carcinogenesis. Oncogene (2001) 20, 16 - 23.