The Hepatitis B virus X (HBx) protein has been strongly implicated in the carcinogenesis of hepatocellular carcinoma (HCC). However, effects of the HBx protein on cell proliferation and cell death are controversial. This study investigates the effects of the HBx protein on liver regeneration in two independent lines of HBx transgenic mice, which developed HCC at around 14 to 16 months of age. High mortality, lower liver mass restoration, and impaired liver regeneration were found in the HBx transgenic mice post-hepatectomy. The levels of alanine aminotransferase and alpha-fetoprotein detected post-hepatectomy increased significantly in the HBx transgenic livers, indicating that they were more susceptible to damage during the regenerative process. Prolonged activation of the immediate-early genes in the HBx transgenic livers suggested that the HBx protein creates a strong effect by promoting the transition of the quiescent hepatocytes from G0 to G1 phase. However, impaired DNA synthesis and mitosis, as well as inhibited activation of G1, S, and G2/M markers, were detected. These results indicated that HBx protein exerted strong growth arrest on hepatocytes and imbalanced cell-cycle progression resulting in the abnormal cell death; this was accompanied by severe fat accumulation and impaired glycogen storage in the HBx transgenic livers. In conclusion, this study provides the first physiological evidence that HBx protein blocks G1/S transition of the hepatocyte cell-cycle progression and causes both a failure of liver functionality and cell death in the regenerating liver of the HBx transgenic mice.