We have reported previously that the proteasome activator PA28γ participates not only in degradation of hepatitis C virus (HCV) core protein in the nucleus but also in the pathogenesis in transgenic mice expressing HCV core protein. However, the biological significance of PA28γ in the propagation of HCV has not been clarified. PA28γ is an activator of proteasome responsible for ubiquitin-independent degradation of substrates in the nucleus. In the present study, knockdown of PA28γ in cells preinfection or postinfection with the JFH-1 strain of HCV impaired viral particle production but exhibited no effect on viral RNA replication. The particle production of HCV in PA28γ knockdown cells was restored by the expression of an small interfering RNA (siRNA)-resistant PA28γ. Although viral proteins were detected in the cytoplasm of cells infected with HCV, suppression of PA28γ expression induced accumulation of HCV core protein in the nucleus. HCV core protein was also degraded in the cytoplasm after ubiquitination by an E3 ubiquitin ligase, E6AP. Knockdown of PA28γ enhanced ubiquitination of core protein and impaired virus production, whereas that of E6AP reduced ubiquitination of core protein and enhanced virus production. Furthermore, virus production in the PA28γ knockdown cells was restored through knockdown of E6AP or expression of the siRNA-resistant wild-type but not mutant PA28γ incapable of activating proteasome activity. Conclusion: Our results suggest that PA28γ participates not only in the pathogenesis but also in the propagation of HCV by regulating the degradation of the core protein in both a ubiquitin-dependent and ubiquitin-independent manner. (HEPATOLOGY 2010;)