We investigated underlying risks for hyperendemic hepatitis C virus (HCV) infection among the 1853 inhabitants of a mountainous village in Eastern Taiwan with high prevalence of HCV and hepatitis B virus (HBV). Among the 80 selected adults, we found that having resided away from the village before 1985 was protective against HCV infection, while residing in the village after 1985 posed little risk for HCV infection to children and young adults < 30 years of age. Among the 559 school children 7 through 14 years of age, anti-HCV prevalence was 1.9%, and the HBV carrier rate was 29%. Following up 270 children 1 year later, we found that new HCV infection occurred in 0.74% and new or repeated HBV infection occurred in 6.5% of the children, indicating distinct transmission patterns between HBV and HCV. Children of anti-HCV-positive mothers were either anti-HCV-negative or were infected by distinct genotypes of HCV from those infecting their mothers; most married couples in whom both were infected, were infected by HCV of discordant genotypes, indicating negligible importance of sexual or vertical HCV transmission. A case-control study comparing 13 anti-HCV-positive and 53 anti-HCV-negative children showed that having received parenteral medication in local clinics was a significant risk for HCV infection. Our data indicate that, unlike the case of HBV, HCV transmission by vertical or sexual route, or through casual contact are extremely inefficient, and our data further suggest that HCV hyperendemicity is unlikely to persist as a result of the more stringent practice of parenteral precautions in nearly all aspects of daily life.