Hepatitis C virus (HCV) establishes chronic infection in a significant number of infected humans, although the mechanisms for chronicity remain largely unknown. We have previously shown that HCV infection in immortalized human hepatocytes (IHH) induces beta interferon (IFN-β) expression (T. Kanda, R. Steele, R. Ray, and R. B. Ray, J. Virol. 81:12375-12381, 2007). However, the regulation of the downstream signaling pathway for IFN-α production by HCV is not clearly understood. In this study, the regulation of the IFN signaling pathway following HCV genotype 1a (clone H77) or genotype 2a (clone JFH1) infection of IHH was examined. HCV infection upregulated expression of total STAT1 but failed to induce phosphorylation and efficient nuclear translocation. Subsequent study revealed that HCV infection induces IFN-stimulated response element activation, as evidenced by upregulation of 2',5'-oligoadenylate synthetase 1. However, nuclear translocation of IRF-7 was impaired following HCV infection. In HCV-infected IHH, IFN-α expression initially increased (up to 24 h) and then decreased at later time points, and IFN-α-inducible protein 27 was not induced. Interestingly, HCV infection blocked IRF-7 nuclear translocation upon poly(I-C) or IFN-α treatment of IHH. Together, our data suggest that HCV infection enhances STAT1 expression but impairs nuclear translocation of IRF-7 and its downstream molecules. These impairments in the IFN-α signaling pathway may, in part, be responsible for establishment of chronic HCV infection.