T cell receptor (TCR) signaling is required for T-cell activation, proliferation, differentiation, and effector function. Hepatitis C virus (HCV) infection is associated with impaired T-cell function leading to persistent viremia, delayed and inconsistent antibody responses, and mild immune dysfunction. Although multiple factors appear to contribute to T-cell dysfunction, a role for HCV particles in this process has not been identified. Here, we show that incubation of primary human CD4+ and CD8+ T-cells with HCV RNA-containing serum, HCV-RNA containing extracellular vesicles (EVs), cell culture derived HCV particles (HCVcc) and HCV envelope pseudotyped retrovirus particles (HCVpp) inhibited TCR-mediated signaling. Since HCVpp's contain only E1 and E2, we examined the effect of HCV E2 on TCR signaling pathways. HCV E2 expression recapitulated HCV particle-induced TCR inhibition. A highly conserved, 51 nucleotide (nt) RNA sequence was sufficient to inhibit TCR signaling. Cells expressing the HCV E2 coding RNA contained a short, virus-derived RNA predicted to be a Dicer substrate, which targeted a phosphatase involved in Src-kinase signaling (PTPRE). T-cells and hepatocytes containing HCV E2 RNA had reduced PTPRE protein levels. Mutation of 6 nts abolished the predicted Dicer interactions and restored PTPRE expression and proximal TCR signaling. HCV RNA did not inhibit distal TCR signaling induced by PMA and Ionomycin; however, HCV E2 protein inhibited distal TCR signaling. This inhibition required lymphocyte-specific tyrosine kinase (Lck). Lck phosphorylated HCV E2 at a conserved tyrosine (Y613), and phospho-E2 inhibited nuclear translocation of NFAT. Mutation of Y613 restored distal TCR signaling, even in the context of HCVpps. Thus, HCV particles delivered viral RNA and E2 protein to T-cells, and these inhibited proximal and distal TCR signaling respectively. These effects of HCV particles likely aid in establishing infection and contribute to viral persistence.