Background Hepatitis B virus (HBV) x protein (HBx) in HepG2 cells causes a moderate decrease in proteolysis activity of the proteasome. A highly conserved Kunitz-type serine protease inhibitor domain within 154 amino acid residues of HBx has been identified. In this study, a peptide chain derived from the Kunitz domain (PKD) was used to study its effect on the cell cycle and apoptosis of HepG2 cells, and investigated the function of PKD on the activities of proteasomes and AAA-ATPase p97, which involves in the ubiquitin-proteasome protein degradation pathway.Methods The PKD peptide (Phe-VaI-Leu-Gly-Gly-Cys-Arg-His-Lys) was chemically synthesized. MTT assays were used to determine the effects of PKD on HepG2 cell growth. Mouse anti-p97 antibody was developed for West blotting to detect the expression of p97. ATPase activity of proteasomes was measured using a colorimetric assay. Peptidase activities of proteasomes were analyzed with various peptidase-specific fluorogenic peptide substrates. Flow cytometry was used to determinate cell cycle phase and apoptosis.Results Viability of HepG2 cells decreased in a PKD-dose-dependent manner. Cells exhibited significant cytotoxicity in the presence of 15 mmol/L of PKD. West blotting analysis showed that expression of p97 was suppressed in HepG2 cells treated with PKD compared to untreated cells. The ATPase activity of proteasomes from immunoprecipitates of HepG2 cells pretreated with PKD was apparently decreased. Chymotryptic activity of proteasomes in HepG2 cells was significantly inhibited by 10mmol/L PKD; tryptic activity and peptidylglutamyl peptide hydrolase activity of proteasomes were less inhibited by PKD than chymotryptic activity. The cell cycle phase of HepG2 cells treated with PKD for 36 hours was blocked largely at the G0-G1 phase, while untreated control cells were mainly in S phase. PKD also significantly induced apoptosis.Conclusions The peptide derived from Kunitz domain of HBx protein induces HepG2 cell growth arrest and apoptosis, which may result from down-regulation of p97 expression, and decrease of both the ATPase and chymotryptic activities of proteasomes.