The regulatory DNA sequence elements that control the expression of the hepatitis B virus major surface antigen gene in the hepatoblastoma cell line HepG2 were analyzed by using transient transfection assays. In this system, the hepatitis B virus enhancer increases transcription from the surface antigen promoter approximately twofold. The promoter elements regulating the expression of this gene are within a 200-nucleotide sequence located immediately upstream of the transcription initiation sites. The promoter consists of an 85-nucleotide distal element which increases transcription from the surface antigen gene by two- to fourfold and a proximal element of approximately 115 nucleotides which is essential for transcriptional activity. The proximal and distal promoter elements were shown to bind factors present in HepG2 nuclear extracts, which is consistent with the regulatory role demonstrated for these sequences. The regulatory role of these promoter sequences in the hepatocellular carcinoma cell lines PLC/PRF/5 and Hep3B was also demonstrated, indicating similar transcriptional regulation of the surface antigen gene in each of these differentiated hepatoma cell lines.