Hepatocellular carcinoma (
HCC
) is a common cancer with poor prognosis. Hepatitis B virus (
HBV
) is one of the leading causes of
HCC
, but the precise mechanisms by which this infection promotes cancer development are not fully understood. Recently, miR‐340‐5p, a micro
RNA
(mi
RNA
) that has been identified as a cancer suppressor gene, was found to inhibit the migration and invasion of liver cancer cells. However, the effect of miR‐340‐5p on cell proliferation and apoptosis in
HBV
‐associated
HCC
remains unknown. In our study, we show that miR‐340‐5p plays an important role during
HBV
infection and hepatocellular carcinoma development. Specifically, this mi
RNA
directly binds to the
mRNA
encoding activating transcription factor 7 (
ATF
7), a protein that both promotes cell proliferation and suppresses apoptosis through its interaction with heat shock protein A member 1B (
HSPA
1B). We further found that miR‐340‐5p is downregulated by
HBV
, which enhances
ATF
7 expression, leading to enhanced cell proliferation and inhibition of apoptosis. Notably,
ATF
7 is upregulated in
HCC
tissue, suggesting that
HBV
may target miR‐340‐5p in vivo to promote
ATF
7/
HSPA
1B‐mediated proliferation and apoptosis and regulate liver cancer progression. This work helps to elucidate the complex interactions between
HBV
and host mi
RNA
s and further suggests that miR‐340‐5p may represent a promising candidate for the development of improved therapeutic strategies for
HCC
.