High level expression of hepatitis C virus core protein (HCV-C) was detected in hilar cholangiocarcinoma tissues in our previous studies. This protein played an important role in the process of cancer cell inversion and proliferation, by some direct and indirect effects on certain genes. Based on this observation, we investigated the effect of HCV-C on human normal biliary epithelial (hBE) cell transformation and tumor development. Plasmid pHCV-C encoding the gene of HCV core protein was constructed and transfected into hBE cells. The expression and the biological effect of HCV-C in HCV-C gene-modified hBE cells were determined in vitro and in vivo. The clone formation rates of hBE cells transfected with pHCV-C, pcdna3.1 and mock-transfected cells were 36, 2.5 and 1.5%, respectively. Tumor developed in 7 of 7 nude mice after incubated with pHCV-C transfected hBE cells, while no tumor appeared in mice injected with pcdna3.1- and mock-transfected hBE cells. To investigate the possible mechanism of malignant transformation, we further studied the telomerase activity and human telomerase reverse transcriptase (hTERT) expression in pHCV-C transfected hBE cells. The elevated expression of hTERT was confirmed by RT-PCR, immunocytochemistry (ICC) and Western blot analysis, which in turn elevated the telomerase activity, confirmed by TRAP-ELISA. These results indicated that HCV-C protein could participate in malignant transformation of human normal biliary epithelial cells and induce cholangiocarcinoma tumorigenesis, and the activation of telomerase was one of the possible mechanisms.