Hepatitis C virus (HCV) is the only known positive-stranded RNA virus that causes persistent lifelong infections in humans. Accumulation of HCV RNA can be inhibited with alpha interferon (IFN-alpha) in vivo and in culture cells. We used cell-based assay systems to investigate the mechanisms responsible for the cytokine-induced inhibition of HCV replication. The results showed that IFN-alpha could suppress the accumulation of viral RNA by a noncytopathic pathway and could also induce apoptosis of virally infected cells in a concentration- and cell line-dependent fashion. Whereas the noncytopathic IFN-alpha response depended on a functional Jak-STAT signal transduction pathway, it did not appear to require double-stranded RNA-dependent pathways. Moreover, we found that functional proteasomes were required for establishment of the IFN-alpha response against HCV. Based on the results described in this study we propose a model for the mechanism by which IFN-alpha therapy suppresses HCV replication in chronic infections by both cytopathic and noncytopathic means.