Chronic hepatitis C is a major public health problem. Despite numerous clinical studies in humans and experimental observations made in chimpanzees, hepatitis C pathogenesis remains poorly understood. Here, we review the clinical features of acute and chronic disease, and discuss the role of the immune system in the pathogenesis of disease. Many are aware of the dual role of T cells: responsibility for clearance of the virus during acute phase; and liver injury during chronic phase. Nonetheless, there is an emerging belief that failure to prime HCV-specific T cells is responsible for the failure to spontaneously clear the virus, and possibly, for the lack of response to pegylated-IFNalpha(2a)/ribavirin therapy. We have focused on the latest suspects, plasmacytoid dendritic cells (pDCs), considered to be the professional type I IFNs producing cells. We review the somewhat contradictory data regarding the functional capacity of pDCs in chronic HCV patients and argue that, while lower in relative concentration as compared to healthy individuals, they are not defective in their ability to initiate an innate inflammatory response. Thus, instead of being the culprit, pDCs may in fact represent a novel therapeutic target in order to improve upon existing therapies for treating HCV patients.