We have previously reported the establishment of well-differentiated BALB/c mouse liver (ML) cell lines. Transfection of these cell lines with hepatitis B virus (HBV) DNA led to the expression of HBV-specific antigens and integration of HBV sequences in the cellular genome. Two cloned HBV-transfected ML cell lines, ML-2(HBV) and ML-3(HBV), expressed viral antigens and were highly tumorigenic in nude mice. However, the tumorigenicity of the two cell lines was significantly reduced in BALB/c mice. Southern blot analyses showed that the integrated HBV sequences were retained in tumors growing in nude mice but deleted in tumors growing in BALB/c mice. Furthermore, the deletion of HBV DNA was accompanied by deletion of chromosomal sequences flanking the HBV integration sites. In ML-2(HBV) cells, a significant reduction in chromosomal number was also observed. These results suggest that the immune response of BALB/c mice selected against hepatocellular carcinoma (HCC) cells expressing viral antigens and led to the proliferation of cells with deleted HBV sequences and concomitant chromosome aberrations. By using this mechanism, HCC cells escape the immune surveillance and gain the advantage of cell growth.