Hepatitis B virus (HBV) gene expression is mainly regulated at the transcription initiation level. The viral X protein (pX) is a transcription coactivator/mediator targeting TFIIB for the recruitment of RNA polymerase II. Here we report a novel pX nuclear target designated HBXAP (hepatitis B virus X-associated protein). HBXAP is a novel cellular nuclear protein containing a PHD (plant homology domain) finger, a domain shared by many proteins that play roles in chromatin remodeling, transcription coactivation, and oncogenesis. pX physically interacts with HBXAP in vitro and in vivo via the HBXAP region containing the PHD finger. At the functional level HBXAP increases HBV transcription in a pX-dependent manner suggesting a role for this interaction in the virus life cycle. Interestingly, HBXAP collaborates with pX in coactivating the transcriptional activator NF-κB. Coactivation of NF-κB was also observed in tumor necrosis factor α-treated cells suggesting that pX-HBXAP functional collaboration localized downstream to the NF-κB nuclear import. Collectively our data suggest that pX recruits and potentiates a novel putative transcription coactivator to regulate NF-κB. The implication of pX-HBXAP interaction in the development of hepatocellular carcinoma is discussed.