Fragments of the cloned hepatitis B virus (HBV) genome were assayed in vivo for the presence of a transcriptional enhancer element. We demonstrate that sequences positioned approximately 450 bp upstream from the HBcAg gene promoter are required for its efficient activity. These HBV stimulatory sequences activate transcription when inserted upstream to a heterologous SV40 early promoter. Like other known enhancer elements, this HBV sequence acts in an orientation-independent manner. Furthermore, the HBV enhancer element exhibits a preferred activity in a human hepatoma cell line.