Viral breakthroughs (VB), defined as having detectable HCV VL while on anti-HCV therapy after achieving maximal suppression, have not yet been characterized with the use of PEG-IFN in HIV/HCV-coinfected patients. We evaluated possible mechanisms for VB among HIV/HCV-coinfected patients receiving PEG-IFN/RBV. Thirty HIV/HCV coinfected patients were treated with PEG-IFN (1.5 mug/kg sc qwk) and RBV (1-1.2 g daily) for 48 weeks. Liver chemistry, HCV VL, genotyping, DNA microarray, and sequencing of HCV E-2 envelope were performed before and during treatment. VB had lower baseline HCV VL but higher ALT and AST than relapsers (ETR) (p < 0.05) and lower CD4+ T lymphocytes (%) than patients with sustained virological responses (SVR), but similar first and second phase HCV viral kinetics (vs. ETR and SVR; p > 0.05). HCV genotypes and envelope sequences were similar for patients with VB pretreatment and at break-through. VB had higher levels of interferon-induced gene (IFIG) expression pretreatment than patients with ETR (p < 0.01). HIV/HCV-coinfected patients have a high rate of VB on PEG-IFN/RBV therapy characterized by higher levels of IFIG expression, immunodeficiency, and hepatic inflammation. Novel strategies are required for the treatment of persons with VB.