Currently available therapies for the treatment of chronic hepatitis C are effective in half of patients, but are expensive, often poorly tolerated, and unsuitable for certain patient populations. The ideal therapy would be highly effective, orally bioavailable, have minimal side effects, be cost effective, and suitable for the majority of patients with hepatitis C. Recent advances in understanding the replication cycle of hepatitis C virus (HCV) and structural, crystallographic definitions of components of the viral polyprotein have improved the prospects for development of novel therapies. The lack of a small animal model of HCV infection continues to hamper progress in the preclinical evaluation of new antivirals and vaccines. Strategies to enhance response to current therapies include the development of novel interferons and delivery systems, nucleoside analogues that have reduced hemolysis compared with ribavirin, inosine 5' monophosphate dehydrogenase inhibitors, and other immunomodulators that are being evaluated as adjunctive therapy to interferon-based regimens. Compounds in preclinical or early phase human trials include small molecules that inhibit virus specific enzymes (such as the serine proteases, RNA polymerase and helicase), or those that prevent translation initiation (such as antisense molecules and ribozymes). Antifibrotic agents are also being developed in an attempt to prevent disease progression in patients in whom HCV RNA cannot be eradicated. While the advent of these newer compounds represent an exciting phase in the treatment of HCV, their safety and efficacy need to be established. Most of these newer therapies are unlikely to be available for routine clinical use in the next 3 to 5 years.