The natural history of untreated chronic hepatitis C is controversial, and direct knowledge of the long-term clinical and economic outcomes of current alpha interferon treatment regimens remains limited. Decision analytic models using available information on outcome probabilities and associated health care costs in the United States have been developed but are available only in abstract form. They suggest that chronic hepatitis C is a life-shortening disease and that alpha interferon treatment, for 6 or 12 months, despite its up-front costs and failure to induce a prolonged therapeutic response in most patients, increases life expectancy (which nevertheless is still reduced). It does so with a marginal cost-effectiveness well within the acceptable range of medical interventions in the United States. Even empiric therapy, without regard to viral level, genotype, and baseline histology, is within an acceptable cost-effectiveness range. Improving the response rate is likely to make treatment even more cost-effective and possibly cost-saving. Discounting at 3% would also lower the marginal cost-effectiveness; treatment of younger patients would likely lead to cost-savings. Future needs include the development of better databases and cost data for estimating outcomes.