HCV NS3 protein plays a central role in viral polyprotein processing and RNA replication. We demonstrate that the NS3 protease (NS3(pro)) domain alone can specifically bind to HCV-IRES RNA, predominantly in the SLIV region. The cleavage activity of the NS3 protease domain is reduced upon HCV-RNA binding. More importantly, NS3(pro) binding to the SLIV hinders the interaction of La protein, a cellular IRES-trans acting factor required for HCV IRES-mediated translation, resulting in inhibition of HCV-IRES activity. Although overexpression of both NS3(pro) as well as the full length NS3 protein decreased the level of HCV IRES mediated translation, replication of HCV replicon RNA was enhanced significantly. These observations suggest that the NS3(pro) binding to HCV IRES reduces translation in favor of RNA replication. The competition between the host factor (La) and the viral protein (NS3) for binding to HCV IRES might regulate the molecular switch from translation to replication of HCV.