Amphotropic retroviral expression systems were used to synthesize hepatitis B virus surface antigen (HBsAg) and core antigen. The vectors permitted establishment of cell lines which expressed antigen from either the retroviral long terminal repeat or the mouse metallothionein-I promoter. HBsAgs were synthesized containing no pre-S sequences, pre-S(2) sequences alone, or pre-S(1) plus pre-S(2) sequences. Inclusion of pre-S(2) sequences did not affect the secretion or density of HBsAg particles but did reduce their mass by approximately 30%. Addition of pre-S(1) sequences almost completely abolished secretion of HBsAg and resulted in its localization in an aqueous-nonextractable pre- or early-Golgi cellular compartment. HBsAg was localized to the cytoplasm of the cell. This localization was unaffected by the presence of pre-S sequences in the antigen. Cell lines synthesizing hepatitis B antigens from core DNA fragments, containing or not containing precore sequences, secreted hepatitis B e antigen. However, the absence of precore DNA sequences resulted in additional synthesis of hepatitis core antigen, which was predominantly nuclear in localization.