Summary. The on-treatment impact of interferon-based therapies on quality of life (QOL), work productivity, and medical resource utilization has not been systematically studied. We evaluated the effects of treatment with peginterferon alpha (pegIFNα) 2a monotherapy and the combination of interferon alpha (IFNα) 2b plus ribavirin (RBV) on health-related QOL, work productivity and resource utilization. A total of 412 patients with hepatitis C infection were randomized to open-label treatment with either pegIFNα 2a (n = 206) or IFNα 2b/RBV (n = 206). PegIFNα 2a was administered subcutaneously at a dose of 180 μg once weekly for 48 weeks; and IFNα 2b/RBV at doses of 3 MU thrice weekly subcutaneously and 1000–1200 mg/day orally. Outcome measures included the SF-36 Health Survey Questionnaire and additional generic and specific scales. During treatment, for all SF-36 summary and Hepatitis Quality of Life Questionnaire (HQLQ)-specific scales, the pegIFNα 2a group experienced less impairment than did the IFNα 2b/RBV patients. The between-treatment differences were significant for many of the scores particularly in the first 24 weeks of treatment. Across all measures of work functioning and productivity at each visit, patients randomized to pegIFNα 2a treatment showed less impairment relative to the group treated with IFNα 2b/RBV. Hence treatment with pegIFNα 2a relative to IFNα 2b/RBV minimizes the adverse impact of therapy on health-related QOL. Patients randomized to pegIFNα 2a had improved work productivity, less activity impairment, decreased need for prescription drugs to treat adverse effects, and better adherence to therapy.