Hepatitis B viral infection is one of the leading causes of hepatocellular carcinoma (HCC) worldwide. Although several viral factors have been identified that may increase the risk for HCC development, the molecular mechanisms leading to the transformation of normal hepatocytes into cancer cells remain elusive. In this study, we demonstrated that the intracellular hepatitis B e antigen (HBeAg) and its precore precursors, but not their homologous core protein, could associate with NUMB and thereby impair the stability and transcriptional activity of tumor suppressor p53. HBeAg and its precursors could disrupt p53-NUMB and HDM2-NUMB interactions and tricomplex p53-HDM2-NUMB formation, inhibit the acetylation and translocation of p53 from cytosol to the nucleus, promote HDM2-mediated ubiquitination and degradation of p53, and suppress p53-dependent apoptosis. A xenograft tumorigenicity assay showed that expression of HBeAg and its precursors promoted carcinogenesis in a mouse model. Immunohistochemical analysis of the bioptic liver samples of HCC patients revealed that HBeAg positivity was associated with reduced transcriptional activity of p53. Taken together, the results suggest a role of intracellular HBeAg and its precursors in HCC development. Conclusion: HBeAg and its precursors promote HDM2-mediated degradation and impair transcriptional activity of p53 by interacting with NUMB, consequently contributing to HCC development. (HEPATOLOGY 2016;64:390-404) H epatitis B viral (HBV) infection represents a major public health problem, with more than 350 million humans chronically infected worldwide at risk of developing chronic liver diseases and hepatocellular carcinoma (HCC).(1) HBV is a small, enveloped DNA virus with four open reading frames (C, P, S, and X) in the genome, which results in expression of the seven different HBV proteins through use of varying in-frame start codons. For example, open reading frame preC-C encodes both hepatitis B core antigen (HBcAg) and the precore protein (p25), the latter being processed in the endoplasmic reticulum to produce hepatitis B e antigen (HBeAg or p17) and its intermediate (p22).It has been proposed that HBeAg may contribute to the development of liver cancer, and its role as a marker of active viral replication is most likely associated with increased risk of HCC.(2) Mutations in the precore region, which were the first major common variants of HBV discovered, (3) are first detectable around the time of HBeAg seroconversion and include mutations that prevent HBeAg synthesis without interfering with the production of infectious virions. The most common of these mutations is a G to A substitution at nucleotide 1896Abbreviations: EGFP, enhanced green fluorescent protein; HA, hemagglutinin; HBcAg, hepatitis B core antigen; HBV, hepatitis B virus; HBeAg, hepatitis B e antigen; HCC, hepatocellular carcinoma; mRNA, messenger RNA; wt, wild type.