To develop an animal model of hepatitis C virus (HCV) infection, transgenic mice carrying part of the HCV cDNA (C980) encoding HCV-core and envelope proteins under control of the mouse class I major histocompatibility complex gene (H-2K) regulatory region were produced. HCV-C980 RNA and HCV-core protein were present in livers from line H36 as determined by RNase protection assay and immunostaining, respectively. More than 40 animals from line H36 were examined histologically. Most of these H36 mice after 10 months of age developed spontaneous focal infiltration of lymphocytes, hepatocyte necrosis, degeneration, and altered foci with mitotic hepatocytes. These pathological lesions were absent in livers from the age-matched control littermates. Liver cells from these H36 mice were sensitive to damage induced by intravenous administration of an anti-Fas antibody. It is suggested that HCV-C980 proteins by themselves may be one causative agent of liver cell injury in subjects with HCV infection.