Hepatitis C virus (HCV) is a blood-borne pathogen and a major cause of liver disease worldwide. Gene expression profiling was used to characterize the transcriptional response to HCV H77c infection. Evidence is presented for activation of innate antiviral signaling pathways as well as induction of lipid metabolism genes, which may contribute to oxidative stress. We also found that infection of chimeric SCID/Alb-uPA mice by HCV led to signs of hepatocyte damage and apoptosis, which in patients plays a role in activation of stellate cells, recruitment of macrophages, and the subsequent development of fibrosis. Infection of chimeric mice with HCV H77c also led an inflammatory response characterized by infiltration of monocytes and macrophages. There was increased apoptosis in HCV-infected human hepatocytes in H77c-infected mice but not in mice inoculated with a replication incompetent H77c mutant. Moreover, TUNEL reactivity was restricted to HCV-infected hepatocytes, but an increase in FAS expression was not. To gain insight into the factors contributing specific apoptosis of HCV infected cells, immunohistological and confocal microscopy using antibodies for key apoptotic mediators was done. We found that the ER chaperone BiP/GRP78 was increased in HCV-infected cells as was activated BAX, but the activator of ER stress–mediated apoptosis CHOP was not. We found that overall levels of NF-κB and BCL-xL were increased by infection; however, within an infected liver, comparison of infected cells to uninfected cells indicated both NF-κB and BCL-xL were decreased in HCV-infected cells. We conclude that HCV contributes to hepatocyte damage and apoptosis by inducing stress and pro-apoptotic BAX while preventing the induction of anti-apoptotic NF-κB and BCL-xL, thus sensitizing hepatocytes to apoptosis.