Although many studies on the risk factors and their carcinogenesis in adult hepatocellular carcinoma (HCC) have been reported, they remain poorly understood in childhood HCC. A retrospective study of 42 HCC cases in Asian children was conducted. Hepatitis B virus (HBV)-DNA in HCC tissues was detected in 36 of 42 (86%) cases tested, while no hepatitis C virus (HCV)-RNA was detectable in any of HCCs. Twenty of 36 (56%) HCC cases were accompanied by cirrhosis. Surprisingly, very high prevalence of the HBV pre-S deletion mutant was recognized in 27 of 30 (90%) HCCs examined. They occurred most frequently in pre-S2 (20/27, 74%) followed by pre-S1 (5/27, 18.5%), and both pre-S1/S2 (2/27, 7.4%). Interestingly, the pre-S2 mutant consistently appeared with deletion at nt 4-57 in all of the 20 cases with the pre-S2 mutant (100%) and within this locus in the two cases with both pre-S-1/S2 mutants. Type II ground-glass hepatocytes in non-tumorous livers were seen in 15 of the 22 HCCs with the pre-S2 deletion mutant (68%). This hotspot mutation in the pre-S2 was further confirmed by complete genomic sequence of HBV in a Japanese boy who eventually developed HCC. Our result strongly suggests that HBV is a major contributor to the development of HCC in Asian children. The HBV pre-S2 deletion mutant at nt 4-57 which has a CD8 T-cell epitope could be responsible for the emergence and aggressive outcome of childhood HCC. Determination of this hotspot mutation in the pre-S2 region could be a useful index for predicting the clinical outcome of HCC development.