Hepatitis C virus (HCV) replicates at a low rate and this makes its detection and intrahepatic localization difficult. To evaluate the clinical implications and effect of interferon alfa (IFN-α) therapy on hepatic expression of HCV RNA, HCV RNA was detected by in situ reverse-transcription polymerase chain reaction (IS-RT-PCR) in formalin-fixed paraffin-embedded liver sections from 26 patients with chronic hepatitis C. Results were compared with RT-PCR of HCV RNA extracted from liver sections/tissue. Twenty-four paired post-IFN-α treatment biopsy specimens were also assessed. Using RT-PCR of the extracted RNA as a positive standard and non-HCV liver sections as the negative standard, the sensitivity and specificity of IS-RT-PCR were 69% and 100%, respectively. HCV RNA was detected in the cytoplasm of hepatocytes (median, 5% hepatocytes positive; range, 0 to 35%) and very occasionally in infiltrating mononuclear cells. There was no correlation between hepatic expression of HCV RNA and the clinical, biochemical parameters, total and activity scores of histology activity index. Presence of HCV RNA in liver as detected by IS-RT-PCR was associated with higher serum HCV RNA levels (4.9 × 106 vs. 0.4 × 106 genome Eq/mL, P < .01). There was no difference in the pretreatment proportion of HCV RNA-positive hepatocytes among patients with different biochemical responses to IFN-α therapy. In the posttreatment samples, HCV RNA was undetectable by IS-RT-PCR in 16 of 24 patients (P < .01), including all 4 patients who had complete and sustained response (SR). We conclude that HCV RNA was detected by IS-RT-PCR in 0 to 35% of hepatocytes in patients with chronic HCV infection, detection of HCV RNA in liver by IS-RT-PCR was associated with higher viremia levels and IFN-α therapy reduced hepatocytic expression of HCV RNA.