The X gene product of the human hepatitis B virus (HBx) is a transcriptional activator of various viral and cellular genes. We recently have determined that the production of tumor necrosis factor-alpha (TNF-alpha) by HBV-infected hepatocytes is transcriptionally up-regulated by HBx, involving nuclear factor of activated T cells (NF-AT)-dependent activation of the TNF-alpha gene promoter. Here we show that HBx activates NF-AT by a cyclosporin A-sensitive mechanism involving dephosphorylation and nuclear translocation of the transcription factor. Luciferase gene expression assays demonstrated that HBx transactivates transcription through NF-AT-binding sites and activates a Gal4-NF-AT chimeric protein. DNA-protein interaction assays revealed that HBx induces the formation of NF-AT-containing DNA-binding complexes. Immunofluorescence analysis demonstrated that HBx induces the nuclear translocation of NF-AT, which can be blocked by the immunosuppressive drug cyclosporin A. Furthermore, immunoblot analysis showed that the HBx-induced activation and translocation of NF-AT are associated with its dephosphorylation. Thus, HBx may play a relevant role in the intrahepatic inflammatory processes by inducing locally the expression of cytokines that are regulated by NF-AT.