The known mechanisms of hepatitis C virus (HCV) clearance and their failure in persistent infection are discussed. Interferon-alpha is the main treatment in chronic HCV but has shown poor sustained virological response rates when used as a monotherapy. The effects of interferon-a may include inhibition of HCV virion production by an effect on viral RNA and protein synthesis, enhancement of immune lysis of HCV infected cells, inhibition of hepatic fibrosis by an effect on TGFbeta, and an effect on HCV induced carcinogenesis. Mathematical modelling studies have provided insights into the mechanisms of action of interferon-alpha in chronic HCV. The two-phase plasma HCV RNA disappearance curve may reflect the presence of an interferon-resistant second site of HCV replication either within or outside the liver. Clinical observations and cerebral magnetic resonance scans provide evidence of functional cerebral impairment in HCV infected patients, raising the issue of the central nervous system (CNS) as a site for HCV replication. Recent studies using ribavirin in combination with interferon suggest that this approach doubles the sustained response rates obtained without having a major effect on the initial rate of HCV clearance (see Zeuzem paper). The potential mechanisms of action of ribavirin, although not yet fully understood, include inhibition of synthesis of GTP by an effect on inosine monophosphate dehydrogenase thereby limiting viral RNA synthesis, and enhancement of TH1 responses, which may assist viral clearance. There is no significant effect on HCV RNA polymerase activity. It is possible that ribavirin may have activity at extrahepatic sites of HCV infection, thus explaining the marked reduction in relapse rates with combination therapy, without an appreciable effect on initial antiviral response.