We have previously shown that alpha/beta interferon (IFN-alpha/beta) and gamma interferon (IFN-gamma) inhibit hepatitis B virus (HBV) replication by eliminating pregenomic RNA containing viral capsids from the hepatocyte. We have also shown that HBV-specific cytotoxic T lymphocytes that induce IFN-gamma and tumor necrosis factor alpha (TNF-alpha) in the liver can inhibit HBV gene expression by destabilizing preformed viral mRNA. In order to further study the antiviral activity of IFN-alpha/beta, IFN-gamma, and TNF-alpha at the molecular level, we sought to reproduce these observations in an in vitro system. Accordingly, hepatocytes were derived from the livers of HBV-transgenic mice that also expressed the constitutively active cytoplasmic domain of the human hepatocyte growth factor receptor (c-Met). Here, we show that the resultant well-differentiated, continuous hepatocyte cell lines (HBV-Met) replicate HBV and that viral replication in these cells is efficiently controlled by IFN-alpha/beta or IFN-gamma, which eliminate pregenomic RNA-containing capsids from the cells as they do in the liver. Furthermore, we demonstrate that IFN-gamma, but not IFN-alpha/beta, is capable of inhibiting HBV gene expression in this system, especially when it acts synergistically with TNF-alpha. These cells should facilitate the analysis of the intracellular signaling pathways and effector mechanisms responsible for these antiviral effects.