Of the three envelope glycoproteins encoded by hepatitis B virus (HBV) that are collectively referred to as HBV surface antigen (HBsAg), the large HBsAg (LHBs) glycoprotein is expressed preferentially in HBV-associated hepatocellular carcinoma. LHBs can act as an oncogene in transgenic mice, but how it contributes functionally to hepatocarcinogenesis remains unclear. In this study, we determined the molecular and functional roles of LHBs during HBV-associated hepatocarcinogenesis. LHBs increased tumor formation of hepatoma cells. Moreover, expression of LHBs but not other HBV envelope glycoproteins specifically promoted proliferation of hepatoma and hepatic cells in vitro. Mechanistic investigations revealed that these effects were caused by activation of the Src/PI3K/Akt pathway through proximal stimulation of PKCα/Raf1 signaling by LHBs. Proliferation induced by stable LHBs expression was associated with increased G₁–S cell-cycle progression and apoptosis resistance mediated by Src kinase activation, as established in hepatocellular carcinoma clinical specimens. Importantly, LHBs-induced cellular proliferation and tumor formation were reversed by administration of the Src inhibitor saracatinib. Together, our findings suggest that LHBs promotes tumorigenesis of hepatoma cells by triggering a PKCα/Raf1 to Src/PI3K/Akt signaling pathway, revealing novel insights into the underlying mechanisms of HBV-associated hepatocarcinogenesis. Cancer Res; 71(24); 7547–57. ©2011 AACR.