Hepatic iron concentration has consistently been observed as being directly correlated with the response to interferon therapy in chronic hepatitis C virus (HCV). We therefore conducted a randomized, controlled trial comparing iron reduction by phlebotomy with iron reduction followed by retreatment with interferon in 96 patients with chronic hepatitis C who had previously not responded to a course of interferon. During the initial phase when all patients were undergoing phlebotomy, we found that serum alanine transaminase (ALT) activities decreased but by less than 50% from baseline in 67 patients (89%), decreased by more than 50% in 12 patients (13%) and became normal in 9 patients (9%) with no overall change in HCV-RNA levels. Subsequently no patient in either treatment group achieved a sustained virologic response. Improvements in necroinflammatory changes were noted in liver biopsy specimens in those patients receiving phlebotomy plus interferon (mean index 8.59 vs. 7.37, P < .05). A slight but not statistically significant decrease in histologic activity index was noted in those subjects treated by phlebotomy alone (mean index 8.4 vs. 7.75, P not significant). We conclude that, although prior phlebotomy therapy does not improve the rate of sustained response to interferon retreatment, it does result in less liver injury manifested by a decrease in serum transaminase activity and a slight improvement in liver histopathology.