Hepatitis C virus (HCV), a member of the Flaviviridae family, is a positive-stranded RNA virus and is the major cause of both parenterally transmitted and sporadic non-A non-B hepatitis (Houghton, 1996). Current therapy for HCV infection is effective in approximately 25% of patients and there is a clear clinical need for the development of new therapies for treatment of this disease (Bartenschlager, 1997). The HCV genome encodes a single polyprotein (5′-C-E1-E2-p7-NS2-NS3-NS4A-NS4B-NS5A-NS5B-3′), which is processed by a combination of host and virally encoded proteinases into ten discrete proteins. The structural proteins C, E1, E2 and p7 are released from the HCV polyprotein by host-encoded proteinases (Grakoui et al., 1993). The generation of the mature nonstructural (NS) proteins is achieved by the action of proteinases encoded by the virus genome. Cleavages at the NS3-4A, NS4A-4B, NS4B-5A and NS5A-5B junctions are mediated by a serine proteinase contained within the N-terminal 180 amino acid residues of the NS3 protein (Kwong, 1997).Characterization of the NS3-mediated proteolysis indicated that cleavage between NS3 and NS4A is an intramolecular process, whereas cleavage at the remaining sites is intermolecular. The HCV protein NS4A, a 54 residue protein, acts as a cofactor of the NS3 proteinase, which enhances cleavage at all sites by the formation of a heterodimer of the proteinase and the NS4A protein (Kwong, 1997).One strategy for the development of antiviral drugs is the inhibition of virus-encoded proteinases that are essential for virus replication (for example, Roberts, 1990). Recently, two publications (Ingallinella, 1998;Llinàs-Brunet et al., 1998) have demonstrated that peptides based upon the C-terminal cleavage products can inhibit the HCV NS3-4A proteinase. Here we report our work on the expression of an NS3-4A proteinase fusion protein in Escherichia coli, the characterization of its in vitro enzyme activity using peptide substrates and the use of these reagents to guide the design of potent inhibitors of the HCV NS3-4A proteinase (Attwood et al., 1998). The N-terminal portion of the NS3 protein encodes a serine proteinase that is responsible for the cleavage at the NS3-4A, NS4A-4B, NS4B-5A and NS5A-5B junctions. The 54 amino acid NS4A protein is a cofactor that binds to the NS3 protein and enhances its proteolytic activity. This report describes the expression of a recombinant NS3-4A proteinase fusion protein in Escherichia coli and the in vitro characterization of the enzyme activity using synthetic peptide substrates. It then demonstrates how these results were employed to guide the design of potent inhibitors of this enzyme.