The genomes of HBV viruses of two different serotypes were cloned in E. coli. Sequences coding for the major polypeptides of surface antigen (HBsAg) were fused with the 5' end of a cloned yeast arg3 gene. When introduced into yeast, on a suitable vector, the hybrid gene directed the synthesis of a fusion protein. Crude extracts of such strains were shown to contain HBsAg like material having physical properties characteristic of the antigen isolated from the plasma of chronic human carriers, as judged by isopycnic and rate zonal centrifugation. Furthermore, these extracts readily elicit specific anti-HBsAg antibodies in rabbits. Further manipulations of the 5' part of the arg3 gene resulted in the introduction of a unique restriction site located in the 5' non translated leader sequence. The resulting vector was used to construct a recombinant plasmid directing the synthesis of the mature (226 amino acids) HBsAg polypeptide.