Most patients infected with hepatitis C virus (HCV) become chronic carriers. Viruses that efficiently establish persistent infections must have effective ways of evading host defenses. In the case of HCV, little is known about how chronic infections are established or maintained. Besides hepatocytes, several reports suggest that HCV can infect T and B lymphocytes. Since T cells are essential for viral clearance, direct or indirect effects of HCV on T-cell function could influence the outcome of infection. Given that T-cell growth and differentiation require the cytokine interleukin 2 (IL-2), we asked whether HCV might modulate synthesis of IL-2. Portions of the HCV polyprotein were expressed in Jurkat cells under a variety of conditions. We found that the highly conserved HCV core protein, in combination with other stimuli, was able to dramatically activate transcription from the IL-2 promoter. The carboxy-terminal hydrophobic portion of the core protein was required for this activity. Activation was dependent on nuclear factor of activated T cells (NFAT), occurred in cells deficient in the tyrosine kinase p56(lck), and could be blocked by addition of cyclosporin A and by depletion of calcium. These results suggest that the HCV core protein can activate transcription of the IL-2 promoter through the NFAT pathway. This novel activity may have consequences for T-cell development and establishment of persistent infections.