It is well known that hepatitis C virus (HCV) infection may progress to cirrhosis and is linked to the development of hepatocellular carcinoma (HCC). Previous studies have shown that compensated HCV-cirrhosis is related to a certain morbidity and mortality in European patients, but little is known in regard to the clinical outcomes of a similar group of patients in the United States. This study investigated this category of patients in terms of the incidence of decompensation, development of HCC, mortality, and the predictive risk factors for morbidity and mortality. The potential effects of interferon (IFN) therapy on outcomes of the disease also were assessed. A total of 112 patients with compensated HCV-cirrhosis and a documented history of either intravenous drug abuse (IVDA) or transfusion were consecutively enrolled. The mean follow-up interval was 4.5 (2-7.7) years. The cumulative probabilities for decompensation and development of HCC were 22.2% and 10.1% in 5 years, with an estimated yearly incidence of 4.4% and 2.0%, respectively. The cumulative survival probability was 82.8% from entry and 51.1% from decompensation in 5 years, with estimated yearly events of mortality and liver transplantation of 3.4% and 9.8%, respectively. It was found that age at entry and initial exposure, initial levels of albumin, platelet count, and prothrombin time (PT) were predictive risk factors for developing decompensation, whereas age at entry and initial exposure, history of transfusion, lower initial levels of albumin, platelet count, and viral load were predictive risk factors for events of mortality and liver transplantation. The incidence of decompensation was significantly lower in patients treated with IFN, but age may have played a contributory role. In contrast, neither HCC development nor mortality was significantly altered by IFN therapy. In conclusion, our study indicated that patients with compensated HCV-cirrhosis in the United States progressed slowly and experienced eventual morbidity and mortality. Once decompensation develops, the disease will be more progressive and result in even higher mortality. Further studies will be required to determine the efficacy of IFN on clinical outcomes in this group of patients.