The hepatitis B virus (HBV) X gene shares sequences with both the polymerase and precore genes, carries several regulatory signals critical to the replicative cycle, and its product has a transactivating function. In this study, the X gene sequences of 29 HBV strains from 14 different countries were characterized and compared to all corresponding databank sequences where the origin of the strain was stated. The X gene and its product are relatively well conserved. However, several rare or unique point mutations in the predicted X protein are described which further define regions on the primary sequence which may be of structural and/or functional significance. Phylogenetic analysis of the 29 X genes and their predicted proteins in this study using unrooted trees indicates that a common ancestral sequence gave rise to two main groups of X genes, represented by HBV strains found predominantly either in the Western or Eastern Hemisphere. In turn, each of these two main groups of sequences appear to have branched into two main lineages. Introduction of 33 additional DNA sequences from the databank has further verified these inferences and confirmed the groupings as previously described subgroups A to D. Whilst the split of X gene lineages into subgroups A and D seems feasible on geographical/anthropological grounds, the corresponding split of Eastern Hemisphere lineages into B and C may require an alternative hypothesis. Additionally, there was a correlation between the HBeAg/anti-HBeAg status of our patients and nucleotide identity at two positions in the core promoter, 52 and 50 bases upstream from the precore start codon. This finding, also shown recently by others, suggests that control of HBeAg secretion may involve mutations affecting transcription and not only precore/core translation.