The expression of multidrug resistance (mdr) genes was investigated in the livers of transgenic mice that express the human hepatitis B virus large envelope polypeptide under the transcriptional control of a liver-specific promoter. These mice develop a storage disease due to the accumulation of a nonsecretable form of hepatitis B surface antigen in the hepatocyte. Liver cell injury is followed by a hepatocellular proliferative response, dysplasia, microscopic nodular hyperplasia, and finally hepatocellular carcinoma. The expression of mdr1, mdr2, and mdr3 genes was analyzed in livers at different stages of the disease by RNase protection assay, Western blot, and immunohistochemistry. RNase protection assay revealed that mdr3 mRNA expression was moderately increased in tissue with microscopic nodular hyperplasia and significantly overexpressed in hepatocellular carcinoma but undetectable in earlier stages of the disease. Western blot using isoform-specific anti-mdr3 antibody demonstrated that the expression of mdr3 protein reflected the steady-state level of mdr3 mRNA. Immunohistochemical analyses using anti-mdr3 isoform-specific antibody and monoclonal antibody C219, which recognizes all the three mdr isoforms, demonstrated selective overexpression in preneoplastic foci during the stage of microscopic nodular hyperplasia as well as in neoplastic hepatocytes in hepatocellular carcinoma. No consistent activation of mdr1 and mdr2 (but occasional coactivation with mdr1) genes during hepatocarcinogenesis was observed. Our results suggest that the hepatocellular mdr3-specific activation mechanism is associated with the late events of hepatocarcinogenesis in this model. The predictable kinetics of mdr gene expression in this transgenic tumor model suggest that it is suitable for future studies of the mechanism of mdr gene activation and the possible pharmacological consequences for mdr3 gene expression of hepatocellular carcinoma.