For many years our knowledge on hepatitis C virus (HCV) replication has been based on in vitro experiments or transfection studies. Recently, the first reliable system for studying viral replication in tissue culture cells was developed. Taking advantage of this system, we examined in detail the localization of viral nonstructural (NS) proteins in cells containing functional replication complexes. By fractionation experiments and immunomicroscopy, we observed that all NS proteins were associated with the endoplasmic reticulum (ER) membranes, confirming the hypothesis that the ER is the site of membrane-associated HCV RNA replication. Interestingly, NS3 and NS4A were preferentially localized in endoplasmic reticulum cisternae surrounding mitochondria, suggesting additional subcellular compartment-related functions for these viral proteins. Furthermore, the immunoelectron microscopy revealed the loss of the organization and other morphological alterations of the ER (convoluted cisternae and paracrystalline structures), resembling alterations observed in liver biopsies of HCV-infected individuals and in flavivirus-infected cells.