Inevitable long-term therapy with nucleos(t)ide analogs in patients with chronic hepatitis B virus (HBV) infection has selected reverse-transcriptase (rt) mutants in a substantial proportion of patients. Some of these mutants introduce premature stop codons in the overlapping surface (s) gene, including rtA181T/sW172*, which has been shown to enhance oncogenicity. The oncogenicity of another drug-resistant mutant, rtM204I/sW196*, has not been studied. We constructed plasmids harboring rtM204I/sW196* and assessed the in vitro cell transformation, endoplasmic reticulum (ER) stress response, and xenograft tumorigenesis of the transformants. Cellular gene expression was analyzed by cDNA microarray and was validated. The rtM204I/sW196* transformants, compared with the control or wild type, showed enhanced transactivation activities for c-fos , increased cell proliferation, decreased apoptosis, more anchorage-independent growth, and enhanced tumor growth in mouse xenografts. X box-binding protein-1 ( XBP1 ) splicing analysis showed no ER stress response. Altered gene expressions, including up-regulated MGST2 and HIF1A , and downregulated transforming growth factor beta-induced ( TGFbi ), were unveiled by cDNA microarray and validated by RT-qPCR. The TGFbi alteration occurred in transformants with wild type or mutated HBV. The altered MGST2 and HIF1A were found only with mutated HBV. The rtM204I/sW196* preS/S truncation may endorse the cell transformation and tumorigenesis ability via altered host gene expressions, including MGST2, HIF1A, and TGFbi . Downregulated TGFbi may be a common mechanism for oncogenicity in HBV surface truncation mutants.