  The Hosotani mechanism in the closed-string theory with current algebra
symmetry is described by the (old covariant) operator method. We compare the
gauge symmetry breaking mechanism in a string theory which contains SU(2)
symmetry originated from current algebra with the one in an equivalent
compactified closed-string theory. We also investigate the difference between
the Hosotani mechanism and the Higgs mechanism in closed-string theories by
calculation of a four-point amplitude of `Higgs' bosons at tree level.
