Hepatitis B virus (HBV) is a major cause of hepatocellular carcinoma (HCC). Previous studies have identified recurrent nonsense mutations in the HBV large S (LHBs) gene from the liver from HBV core antigen-positive HCC patients. These nonsense mutants have been shown to be oncogenic in mouse xenograft models using a mouse embryonic fibroblast cell line. Here, we expressed in a liver cell line Huh-7 a carboxy terminally truncated protein from a nonsense mutant of the LHBs gene, sW182* (stop codon at tryptophane-182). Although the sW182* protein appeared not to be very stable in the cultured liver cells, we confirmed that the protein can be highly expressed and retained for a prolonged period of time in the hepatocytes in the mouse liver, indicating its stable nature in the physiological condition. In the Huh-7 cells, the sW182* mutant downregulated tumor suppressors p53 and Smad4. This downregulation was reversed by a proteasome inhibitor MG132, implying the involvement of proteasome-based protein degradation in the observed regulation of the tumor suppressors. On the other hand, we found that c-Jun activation domain-binding protein 1 (Jab1) physically interacts with the sW182*, but not wild-type LHBs. RNA interference (RNAi) of Jab1 restored the levels of the downregulated p53 and Smad4. The sW182* mutant inhibited the promoter activity of downstream target genes of the tumor suppressors. Consistently, Jab1 RNAi reversed the inhibition. These results suggest that the LHBs nonsense mutant antagonizes the tumor suppressor pathways through Jab1 in the liver contributing to HCC development.