Chronic hepatitis B virus (HBV) infection is a leading cause of hepatocellular carcinoma (HCC), but its role in the transformation process remains unclear. HBV encodes a small protein, known as HBx, which is required for infection and has been implicated in hepatocarcinogenesis. Here we show that HBx induces lagging chromosomes during mitosis, which in turn leads to formation of aberrant mitotic spindles and multinucleated cells. These effects require the binding of HBx to UV-damaged DNA binding protein 1 (DDB1), a protein involved in DNA repair and cell cycle regulation, and are unexpectedly attributable to HBx interfering with S-phase progression and not directly with mitotic events. HBx also affects S-phase and induces lagging chromosomes when expressed from its natural viral context and, consequently, exhibits deleterious activities in dividing, but not quiescent, hepatoma cells. CONCLUSION: In addition to its reported role in promoting HBV replication, the binding of HBx to DDB1 may induce genetic instability in regenerating hepatocytes and thereby contribute to HCC development, thus making this HBV-host protein interaction an attractive target for new therapeutic intervention.