A serine protease domain contained within the viral NS3 protein is a key player in the maturational processing of the hepatitis C virus polyprotein and a prime target for the development of antiviral drugs. In the present work, we describe a dansylated hexapeptide inhibitor of this enzyme. Active site occupancy by this compound could be monitored following fluorescence resonance energy transfer between the dansyl fluorophore and protein tryptophan residues and could be used to 1) unambiguously assess active site binding of NS3 protease inhibitors, 2) directly determine equilibrium and pre-steady-state parameters of enzyme-inhibitor complex formation, and 3) dissect, using site-directed mutagenesis, the contribution of single residues of NS3 to inhibitor binding in direct binding assays. The assay was also used to characterize the inhibition of the NS3 protease by its cleavage products. We show that enzyme-product inhibitor complex formation depends on the presence of an NS4A cofactor peptide. Equilibrium and pre-steady-state data support an ordered mechanism of ternary (enzyme-inhibitor-cofactor) complex formation, requiring cofactor complexation prior to inhibitor binding.