To determine the pattern and significance of the HCV genetic heterogeneity before and during treatment with recombinant-2b or lymphoblastoid α-interferon, hypervariable region 1 (HVR-1) and NS5A quasispecies were characterised by cloning and sequencing in 12 HCV-1b-infected subjects. Patients were either responder-relapsers or non-responders to treatment. Extensive amino acid sequence analysis was applied to reveal the significance of HCV variation at key sites within HVR-1 and NS5A regions. Genetic complexity, genetic diversity, and the non-synonymous to synonymous substitution ratios of HVR-1 quasispecies decreased during treatment in responder-relapser patients only, and more markedly so following lymphoblastoid α-interferon. In non-responders, the HVR-1 quasispecies broadened. Amino acids G406 and Q409, which represent a major viral epitope, were highly conserved throughout treatment. Responder-relapser patients had a higher mutation frequency in NS5A than non-responders. Lymphoblastoid α-interferon promoted the selection of intermediate Interferon Sensitivity Determining Region (ISDR) sequences, whereas recombinant-2b α-interferon favoured maintenance or selection of conserved ISDR sequences. Variability upstream of the ISDR was associated with treatment response, but the amino acid substitutions conferring higher replicative ability to in vitro HCV replicons were absent in in vivo isolates. In conclusion, the pattern of HVR-1 quasispecies evolution correlates with the clinical response, and the conservation of specific amino acids may be useful for immune targeting in vivo. In responder-relapser patients, the initial HVR-1 evolution resembles that found in sustained responders. Variability within the entire NS5A, as opposed to a single region (ISDR), may have a role in influencing α-interferon treatment outcome. A differential effect of different α-interferon preparations on HCV quasispecies kinetics may exist. J. Med. Virol. 70:62–73, 2003. © 2003 Wiley-Liss, Inc.