Fibrosing cholestatic hepatitis (FCH) is a rapidly progressive form of viral hepatitis B that occurs in severely immunosuppressed patients. Pathologically, the liver in FCH is characterized by widespread hepatocyte vacuolization and apoptosis, which, in contrast to more common forms of hepatitis B, is only rarely associated with significant inflammation. Therefore, it has been proposed that, in FCH, hepatocytes may be injured by a direct cytopathic effect of the virus rather than by the host immune response. In support of this hypothesis, we present evidence that cultured hepatoma cells that had been transfected with a plasmid selectively expressing the viral large surface protein form numerous large vacuoles and undergo apoptosis. The similarity of the cytopathology in FCH in vivo and in these transfected cells in vitro strongly implicates the large surface protein as the direct cause of this acute liver disease. This conclusion is further supported by the published demonstration that hepatocytes tend to accumulate large surface protein in FCH, which may reflect its overexpression by the virus. In conclusion, our data implicate the large surface protein as a major cause of hepatocyte injury in fibrosing cholestatic hepatitis. (HEPATOLOGY2002;36:1400–1407).