Hepatitis C virus (HCV) is a leading cause of chronic viral hepatitis, but an effective vaccine is still not available to prevent infection. Use of neutralizing antibodies could be a potential therapeutic option. In this study, the presence of anti-HCV antibodies in HCV-infected patients was assessed from 50 patients and the presence of neutralizing antibodies was examined using 'hepatitis C virus-like particles'. Antibodies from two samples exhibited significant inhibitory activity, suggesting that these may neutralize viral infection. Antigenic determinants generating the neutralizing antibodies from these two samples were delineated by epitope mapping using the core, E1 and E2 regions and a stretch of 45 amino acid peptide (E2C45) derived from the C-terminal region of HCV-E2 protein (aa 634-679) was designed. Results suggest that this hitherto uncharacterized region has the potential to generate neutralizing antibodies against HCV and thus be effective in preventing virus entry into liver cells. Computational analysis of the structure of the modelled peptide (E2C45) suggested high conformational entropy for this region. Furthermore, E2C45 peptide-generated antibodies could block virus entry and monoclonal antibodies generated against this peptide could also significantly reduce virus replication in a cell culture system. It is possible that the inhibition could be partly due to a conformational alteration of the CD81-binding region, preventing virus attachment to liver cells. In conclusion, this work focused on the discovery of a novel epitope at the C terminus of E2 that induces potent neutralizing antibodies in HCV-infected patients.