Despite recent treatment advances, the majority of patients with chronic hepatitis C fail to respond to antiviral therapy. Although the genetic basis for this resistance is unknown, accumulated evidence suggests that changes in the heterogeneous viral population (quasispecies) may be an important determinant of viral persistence and response to therapy. Sequences within hepatitis C virus (HCV) envelope 1 and envelope 2 genes, inclusive of the hypervariable region 1, were analyzed in parallel with the level of viral replication in serial serum samples obtained from 23 patients who exhibited different patterns of response to therapy and from untreated controls. Our study provides evidence that although the viral diversity before treatment does not predict the response to treatment, the early emergence and dominance of a single viral variant distinguishes patients who will have a sustained therapeutic response from those who subsequently will experience a breakthrough or relapse. A dramatic reduction in genetic diversity leading to an increasingly homogeneous viral population was a consistent feature associated with viral clearance in sustained responders and was independent of HCV genotype. The persistence of variants present before treatment in patients who fail to respond or who experience a breakthrough during therapy strongly suggests the preexistence of viral strains with inherent resistance to IFN. Thus, the study of the evolution of the HCV quasispecies provides prognostic information as early as the first 2 weeks after starting therapy and opens perspectives for elucidating the mechanisms of treatment failure in chronic hepatitis C.