The hepatitis C virus (HCV) is the leading cause of chronic liver disease worldwide. It is estimated that about 170 million people are chronically infected with HCV. Chronic hepatitis C is a major cause of cirrhosis and hepatocellular carcinoma and HCV-related end-stage liver disease is, in many countries, the first cause of liver transplantation. HCV infection is characterized by its propensity to chronicity. Because of its high genetic variability, HCV has the capability to escape the immune response of the host. HCV is not directly cytopathic and liver lesions are mainly related to immune-mediated mechanisms, which are characterized by a predominant type 1 helper cell response. Co-factors influencing the outcome of the disease including age, gender and alcohol consumption are poorly understood and other factors such as immunologic and genetic factors may play an important role. Recent studies have shown that the combination therapy with alpha interferon and ribavirin induces a sustained virological response in about 40% of patients with chronic hepatitis C. The sustained response rates are mainly dependent on the viral genotype (roughly 60% in genotype non-1 and 30% in genotype 1). Reliable diagnostic tools are now available and useful for detecting HCV infection, to quantify viral load and to determine the viral type. The assessment of the viral quasispecies and the characterization of viral sequences might be clinically relevant but standardized and simple techniques are needed. The lack of animal models and of in vitro culture systems hampers the understanding of the pathogenesis of chronic hepatitis C and the development of new antivirals. New therapeutic schedules with higher and/or daily doses of alpha interferon do not seem to improve the efficacy greatly. The conjugation with polyethylene glycol (PEG) improved the pharmacodynamics and the efficacy of alpha interferon. Emerging new therapies include inhibitors of viral enzymes (protease, helicase and polymerase), cytokines (IL-12 and IL-10), antisense oligonucleotides and ribozymes. The first candidate compounds should be available in the next few years. The development of an effective vaccine remains the most difficult and pressing challenge. Because of the high protein variability of HCV, protective vaccines could be extremely difficult to produce and therapeutic vaccines seem more realistic. Considerable progress has been made in the field of HCV since its discovery 10 years ago but a major effort needs to be made in the next decade to control HCV-related liver disease.