A novel transient mechanism for studying hepatitis B virus (HBV) gene expression and replication using recombinant HBV baculovirus to deliver the HBV genome to HepG2 cells was generated. In HBV baculovirus infected HepG2 cells, HBV transcripts, and intracellular and secreted HBV antigens are produced; replication occurs as evidenced by the presence of high levels of intracellular replicative intermediates and protected HBV DNA in the medium. Density-gradient analysis of extracellular HBV DNA indicated that the DNA was contained predominantly in enveloped HBV virions. Covalently closed circular (CCC) DNA is present indicating that, in this system, HBV core particles are capable of delivering newly synthesized HBV genomes back into the nuclei of infected cells. HBV gene expression is driven exclusively from endogenous promoters. Levels of HBV gene expression and replication can be achieved in HBV baculovirus-infected HepG2 cells which far exceed levels found in HepG2 2.2.15 cells. HBV baculovirus infection of HepG2 cells lends itself readily to experimental manipulation as follows: 1) HBV expression can be initiated any time relative to seeding of HepG2 cells; 2) levels of HBV replication can be regulated over a wide range simply by changing the baculovirus multiplicity of infection; 3) HBV replication is readily detectable by one day post infection with HBV baculovirus and persists at least through day eleven post infection; and (4) the transient nature of the infection can be extended and/or enhanced by superinfecting the cultures. We conclude that infection of HepG2 cells by HBV recombinant baculovirus represents a simple to use and highly flexible system for studying the effects of antivirals and/or cytokines on HBV production and for understanding HBV replication and pathogenesis at the molecular level.