The recently developed hepatitis C virus (HCV) subgenomic replicon system was utilized to evaluate the efficacy of several known antiviral agents. Cell lines that persistently maintained a genotype 1b replicon were selected. The replicon resident in each cell line had acquired adaptive mutations in the NS5A region that increased colony-forming efficiency, and some replicons had acquired NS3 mutations that alone did not enhance colony-forming efficiency but were synergistic with NS5A mutations. A replicon constructed from the infectious clone of the HCV-1 strain (genotype 1a) was not capable of inducing colony formation even after the introduction of adaptive mutations identified in the genotype 1b replicon. Alpha interferon (IFN-α), IFN-γ, and ribavirin exhibited antiviral activity, while double-stranded RNA (dsRNA) and tumor necrosis factor alpha did not. Analysis of transcript levels for a series of genes stimulated by IFN (ISGs) or dsRNA following treatment with IFN-α, IFN-γ, and dsRNA revealed that both IFNs increased ISG transcript levels, but that some aspect of the dsRNA response pathway was defective in Huh7 cells and replicon cell lines in comparison to primary chimpanzee and tamarin hepatocytes. The colony-forming efficiency of the replicon was reduced or eliminated following replication in the presence of ribavirin, implicating the induction of error-prone replication. The potential role of error-prone replication in the synergy observed between IFN-α and ribavirin in attaining sustained viral clearance is discussed. These studies reveal characteristics of Huh7 cells that may contribute to their unique capacity to support HCV RNA synthesis and demonstrate the utility of the replicon system for mechanistic studies on antiviral agents.