Two separate promoters, the upstream preS1 and the downstream S promot
ers, give rise to transcripts encoding three forms of the hepatitis B
virus surface protein. Overproduction of large surface protein because
of increased preS1 transcripts leads to a block in secretion of all f
orms of the surface protein and of virion particles. We show here that
a CCAAT element in the S promoter not only increases the amount of S
transcripts, but also decreases the amount of preS1 transcripts by up
to fivefold. Consequently, mutations in this element cause intracellul
ar accumulation of surface proteins because of the secretory block. Th
erefore, this CCAAT element appears to be critical for maintaining the
high ratio of S versus preS1 transcripts that is necessary for the vi
ral life cycle. (C) 1995 Academic Press, Inc.