C-terminal truncation of the middle surface antigen from hepatitis B virus (MHBs) gives rise to a novel transactivating protein, called MHBst. In this study we show that MHBst like the HBx protein of HBV, can cause nuclear appearance of NF-kappa B DNA binding activity and induce various kappa B-controlled reporter genes. While an inhibitor of protein kinase C could not block gene induction by MHBst, the antioxidants N-acetyl-L-cysteine (NAC) and pyrrolidine dithiocarbamate (PDTC) could potently suppress transactivation at mM and microM concentrations, respectively. Also, kappa B-dependent gene induction by the transactivator HBx was blocked. The effects were selective because PDTC did not interfere with MHBst and HBx-induced activation of the c-fos promoter/enhancer, nor with the basal activity of several other reporter genes lacking functional NF-kappa B binding motifs. Our data suggest that induction of a prooxidant state is crucial for the activation of NF-kappa B by MHBst and HBx and might be related to the hepatocarcinogenic potential of the viral proteins. MHBst had a subcellular localization unusual for a viral transactivator: it appeared to be an integral membrane protein of the endoplasmic reticulum.