Integration and transcription of woodchuck hepatitis virus DNA were studied by Southern and Northern blot analysis in 26 hepatocellular carcinomas and in adjacent nontumor tissue of woodchucks (Marmota monax). All liver tissue chronically infected with woodchuck hepatitis virus contained various amounts of episomal and replicative forms of woodchuck hepatitis virus DNA: episomal and replicative forms of woodchuck hepatitis virus DNA without integration were found in six tumors, episomal and integrated woodchuck hepatitis virus DNA was observed in 18 tumors and exclusively integrated woodchuck hepatitis virus DNA was found in two tumors. In most tumors and in all of the liver tissues chronically infected with woodchuck hepatitis virus, two major woodchuck hepatitis virus RNA species (3.7 and 2.1 kilobases) were detected. In tumors of two other animals (HW76 and HW89) with integrated wood-chuck hepatitis virus DNA, only single major transcripts of 3.5 and 2.5 kilobases, respectively, were detected. Hybridization with subcloned woodchuck hepatitis virus DNA probes showed that both aberrant transcripts lacked the C gene and a part of the pre-S1 gene; characterization of corresponding integrated woodchuck hepatitis virus DNA sequences revealed that the C gene was deleted in one tumor, although not in the other. In agreement with the nucleic acid data, we found expression of core protein by Western blotting only in chronically infected liver tissue of these animals, but not in the corresponding tumors. Deletion of the C gene in mRNA may be due to deletion of this gene in the integrated sequences or due to transcriptional regulation.