Interferon alpha (IFN alpha) is the cornerstone therapeutic agent for chronic hepatitis C virus (HCV) infection. Prospective studies have shown that up to 15% of HCV patients receiving IFN alpha develop clinical thyroid disease, and up to 40% become thyroid antibody positive. In some cases IFN-induced thyroiditis (IIT) may result in discontinuation of interferon therapy; thus, IIT represents a major clinical problem for hepatitis C patients receiving IFN alpha therapy. Recently, the mechanisms leading to the development of IIT have begun to be unraveled. It is now clear that HCV itself plays a role in the disease. Moreover, recent data suggest the IFN alpha precipitates thyroiditis by both immune modulatory mechanisms and direct thyroid toxic effects. Genetic factors also play a major role in the etiology of IIT. IIT can manifest both as clinical autoimmune thyroiditis (ie, Hashimoto's thyroiditis and Graves' disease) and as nonautoimmune thyroiditis (ie, destructive thyroiditis). Early detection and therapy of these conditions are important to avoid complications of thyroid disease such as cardiac arrhythmias. This article reviews the epidemiology and clinical manifestations of IIT and the mechanisms causing IIT, focusing on the role of HCV.