The hepatitis B virus core open reading frame with and without the precore domain was expressed in insect cells using a baculovirus expression system. Precore antigen was not properly processed in insect cells and was present in highly insoluble cytoplasmic aggregates. Core antigen without the precore domain formed core particles with a diameter of 28 nm that were secreted into the medium. Both core and precore antigens were phosphorylated in insect cells. The immune response in mice to both antigens yielded antibodies with a high degree of preferential reactivity for the homologous immunizing polypeptide. A kinase activity that phosphorylated core antigen was associated with highly purified core particles. The kinase activity resembled that previously demonstrated for core particles purified from the cytoplasm of infected hepatocytes and detergent-treated Dane particles. Partial resistance of the phosphate-label to phosphatase treatment suggested that some of the phosphorylated sites are in the interior of the particle. The presence of kinase activity in recombinant core particles demonstrated that this activity is not derived from another hepatitis B virus-encoded polypeptide, and the lack of a kinase consensus sequence in the core open reading frame suggests that the kinase is of cellular origin.