High rates of genetic variation ensure the survival of RNA viruses. Although this variation is thought to result from error-prone replication, RNA viruses must also maintain highly conserved genomic segments. A balance between conserved and variable viral elements is especially important in order for viruses to avoid "error catastrophe." Ribavirin has been shown to induce error catastrophe in other RNA viruses. We therefore used a novel hepatitis C virus (HCV) replication system to determine relative mutation frequencies in variable and conserved regions of the HCV genome, and we further evaluated these frequencies in response to ribavirin. We sequenced the 5' untranslated region (5' UTR) and the core, E2 HVR-1, NS5A, and NS5B regions of replicating HCV RNA isolated from cells transfected with a T7 polymerase-driven full-length HCV cDNA plasmid containing a cis-acting hepatitis delta virus ribozyme to control 3' cleavage. We found quasispecies in the E2 HVR-1 and NS5B regions of untreated replicating viral RNAs but not in conserved 5' UTR, core, or NS5A regions, demonstrating that important cis elements regulate mutation rates within specific viral segments. Neither T7-driven replication nor sequencing artifacts produced these nucleotide substitutions in control experiments. Ribavirin broadly increased error generation, especially in otherwise invariant regions, indicating that it acts as an HCV RNA mutagen in vivo. Similar results were obtained in hepatocyte-derived cell lines. These results demonstrate the potential utility of our system for the study of intrinsic factors regulating genetic variation in HCV. Our results further suggest that ribavirin acts clinically by promoting nonviable HCV RNA mutation rates. Finally, the latter result suggests that our replication model may be useful for identifying agents capable of driving replicating virus into error catastrophe.