The cytoplasmic RNA sensors, retinoic acid-inducible gene I and melanoma differentiation-associated gene 5, play crucial roles in innate sensing of hepatitis C virus (HCV). However, the exact identity of the IFN inducer generated during HCV infection is poorly understood. To identify the IFN inducer, we extracted the RNAs from HCV-replicating cells and introduced these into IFN signalling-competent cells to examine IFN production. RNAs isolated from HCV-replicating cells triggered robust IFN-β and IFN-λ production in Huh7 cells in a viral replication-dependent manner, preferentially through the melanoma differentiation-associated gene 5 but not through the retinoic acid-inducible gene I-mediated pathway. The IFN-inducing capacity of HCV RNA survived after calf intestinal alkaline phosphatase and ssRNA-specific S1 nuclease treatment, but was completely eliminated by dsRNA-specific RNase III digestion, suggesting that viral replicative dsRNA is an IFN inducer. Furthermore, HCV viral RNA extracted from replicating cells was sensitive to 5'-monophosphate-dependent 5'→3' exonuclease (TER) digestion, suggesting that the HCV genome lacks a 5'-triphosphate or -diphosphate. In semi-permeabilized cells, the HCV IFN inducer primarily resided in an enclosed membranous structure that protects the IFN inducer from RNase digestion. Taken together, we identified HCV replicative dsRNA as a viral IFN inducer enclosed within the viral replication factory.