Hepatitis C virus (HCV) has a high propensity to establish chronic infection with end-stage liver disease. The high turnover of virus particles and high transcription error rates due to lack of proof-reading function of the viral polymerase imply that HCV exists as quasispecies, thus enabling the virus to evade the host immune response. Clearance of the virus is characterized by a multispecific, vigorous and persistent T-cell response, whereas T-cell responses are weak, narrow and transient in patients who develop chronic infection. At present, standard treatment is a combination of pegylated interferon-α and ribavirin, with a sustained viral response rate of 40-80%, depending on genotype. The mechanisms for the observed synergistic effects of the two drugs are still not known in detail, but in addition to direct antiviral mechanisms, the immunomodulatory effects of both drugs seem to be important, with a shift from Th2- to Th1-cytokine profiles in successfully treated patients. This article describes virus-host relations in the natural course of HCV infection and during treatment.