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We have previously demonstrated that hepatitis C virus (HCV) core protein regulates cellular protooncogenes at the transcriptional level; this observation implicates core protein in the alteration of normal hepatocyte growth. In the present study, the transforming potential of the HCV core gene was investigated by using primary rat embryo fibroblast (REF) cells which were transfected with or without cooperative oncogenes. Integration of the HCV core gene resulted in expression of the viral protein in REF stable transformants. REF cells cotransfected with HCV core and H-ras genes became transformed and exhibited rapid proliferation, anchor-independent growth, and tumor formation in athymic nude mice. Results from these studies suggest that the core protein plays an important role in the regulation of HCV-infected cell growth and in the transformation to tumorigenic phenotype. These observations suggest a possible mechanism for this viral protein in the pathogenesis of hepatocellular carcinoma in HCV-infected humans.