The mechanism and machinery of hepatitis C virus (HCV) RNA replication are still poorly characterized. Our previous study has shown that HCV RNA synthesis occurs on a lipid raft membrane structure [J. Virol. 77 (2003) 77 4160]. In this study, we further characterized these replication complexes (RCs) in Huh-7 cells that support active RNA replication of a subgenomic HCV replicon. Biochemical analysis showed that these membrane structures were resistant to Nonidet P-40 or Triton X-100 (TX-100) at 4 degrees C while solubilized by beta-octylglucoside at 4 degrees C or Triton TX-100 at 37 degrees C, characteristic of lipid rafts. Cholesterol sequestration assay further demonstrated the association between HCV nonstructural (NS) proteins and cholesterol-rich lipid rafts. The RCs contained both minus- and plus-strand HCV RNA, with the plus-stranded RNA being approximately 10-fold more abundant than the minus-strand. Furthermore, the HCV RNA and NS proteins were resistant to RNase and protease digestion, respectively, but became sensitive after treatment with the raft-disrupting agents. These results suggested that the HCV RCs are protected within lipid rafts. Detergent-resistant membrane (DRM) fractions containing NS proteins and viral RNA were capable of HCV RNA synthesis using the endogenous HCV RNA template. NS proteins were distributed in both the ER and the Golgi, but the majority of the active RCs were detected in the Golgi-derived membrane. Depletion of cellular cholesterol selectively reduced HCV RNA replication. These findings provide further insights into the mechanism of HCV replication in vivo.