Hepatitis B surface antigen (HBsAg) particles are secreted by Chinese hamster ovary cells that are stably transfected with the S gene of hepatitis B virus. The assembly of HBsAg into cylindrical and spherical particles occurred intracellularly within the endoplasmic reticulum. HBsAg particles accumulated within large dilated areas of the endoplasmic reticulum and remained within these structures for most of the time prior to secretion from the cells. Once the particles were formed, the HBsAg polypeptides did not appear to become associated with subsequent intracellular organelle membranes or the plasma membrane. HBsAg within the dilated structures did not bind wheat germ agglutinin, indicating that its oligosaccharide chains had not yet been processed to the complex form (containing terminal sialic acid-N-acetylglucosamine residues). The oligosaccharide chains of HBsAg are processed to the complex form and can be detected on the HBsAg after secretion, but this event was not detected within cells. In addition, HBsAg was not observed on the cell surface by indirect immunofluorescence or immunoprecipitation, although immunoelectron microscopy revealed some staining at or near the cell surface. These results suggested that HBsAg was either secreted from cells without being incorporated into the plasma membrane, or that the levels of HBsAg in the plasma membrane were below the limits of detection.