Summary. Acute hepatitis and recovery from woodchuck hepatitis virus (WHV) infection involves increased intrahepatic expression of interferon-gamma (IFN-γ) and tumour necrosis factor-alpha (TNF-α) mRNAs. In the present study, recovery correlated with increased intrahepatic expression of mRNAs for major histocompatibility complex class 1 (MHC1), β2-microglobulin, 2′5′-oligoadenylate synthetase (2′5′-OAS), and indoleamine dioxygenase (IDO). By comparison, acute WHV infection progressing to chronicity was associated with diminished expression of these IFN-γ-associated mRNAs in liver. Transfection of WHV-infected primary hepatocytes (WPH) from WHV carriers with an IFN-γ-expressing plasmid (pIFN-γ) resulted in dose-dependent accumulations of MHC1, TNF-α, 2′5′-OAS, and IDO mRNAs within 96 h. Markers of T cells and immune-mediated cytotoxicity that accumulate in recovering liver were not apparent in WPH based on the relative lack of CD3, CD4, Fas ligand, perforin, and granzyme B mRNAs. Expression of pIFN-γ, and TNF-α-expressing plasmid (pTNF-α), did not affect total WHV RNA, or fully double-stranded WHV DNA in WPH, but each reduced some of the replicative intermediate (RI) species of WHV DNA synthesis. WPH treated with recombinant IFN-α protein had a higher fold induction of 2′5′-OAS mRNA associated with partial reductions in WHV RNAs and the major RI species. Thus, IFN-γ expression in carrier WPH induced several host responses often observed in liver of recovering woodchucks, and impaired a stage of WHV DNA synthesis by a non-cytolytic mechanism mediated by TNF-α. Local enhancement of IFN-γ-associated responses in chronic WHV-infected hepatocytes may promote therapeutic antiviral effects, but additional effector mechanisms evident during recovery appear necessary for more complete clearance of WHV infection.