Hepatitis C virus (HCV) is an important cause of chronic liver disease, but the molecular mechanisms of viral pathogenesis remain to be established. The HCV non-structural protein NS3 complexes with NS4A and has three enzymatic activities: a proteinase and a helicase/NTPase. Recently, catalytically inactive NS3 fragments containing an arginine-rich motif have been reported to interact with, and inhibit, the catalytic subunit of cAMP-dependent protein kinase (PKA C-subunit). Here we demonstrate that full-length, catalytically active NS3/4A, purified from recombinant baculovirus-infected insect cells, is also able to inhibit PKA C-subunit in vitro. This inhibition was abrogated by mutation of either the arginine-rich motif or the conserved helicase motif II, both of which also abolished NTPase activity. As PKA C-subunit inhibition was also enhanced by poly(U) (an activator of NS3 NTPase activity), we hypothesized that PKA C-subunit inhibition could be due to NS3/4A-mediated ATP hydrolysis. This was confirmed by experiments in which a constant ATP concentration was maintained by addition of an ATP regeneration system--under these conditions PKA C-subunit inhibition was not observed. Interestingly, the mutations also abrogated the ability of wild-type NS3/4A to inhibit the PKA-regulated transcription factor CREB in transiently transfected hepatoma cells. Our data are thus not consistent with the previously proposed model in which the arginine-rich motif of NS3 was suggested to act as a pseudosubstrate inhibitor of PKA C-subunit. However, in vivo effects of NS3/4A suggest that ATPase activity may play a role in viral pathology in the infected liver.