A transgenic mouse strain that expresses the hepatitis B virus (HBV) large envelope protein in the liver was used to determine the extent of oxidative DNA damage that occurs during chronic HBV infection. This mouse strain develops a chronic necroinflammatory liver disease that mimics the inflammation, cellular hyperplasia, and increased risk for cancer that is evident in human chronic active hepatitis. When perfused in situ with nitroblue tetrazolium, an indicator for superoxide formation, the liver of transgenic mice displayed intense formazan deposition in Kupffer cells, indicating oxygen radical production, and S-phase hepatocytes were commonly seen adjacent to the stained Kupffer cells. Similar changes were not observed in nontransgenic control livers. To determine whether these events were associated with oxidative DNA damage, genomic DNA from the livers of transgenic mice and nontransgenic controls was isolated and examined for 8-oxo-2'-deoxyguanosine, an oxidatively modified adduct of deoxyguanosine. Results showed a significant, sustained accumulation in steady-state 8-oxo-2'-deoxyguanosine that started early in life exclusively in the transgenic mice and increased progressively with advancing disease. The most pronounced increase occurred in livers exhibiting microscopic nodular hyperplasia, adenomas, and hepatocellular carcinoma. Thus, HBV transgenic mice with chronic active hepatitis display greatly increased hepatic oxidative DNA damage. Moreover, the DNA damage occurs in the presence of heightened hepatocellular proliferation, increasing the probability of fixation of the attendant genetic and chromosomal abnormalities and the development of hepatocellular carcinoma.