Hepatitis C virus (HCV) is a major cause of post-transfusion and sporadic hepatitis worldwide, leading to chronic liver disease in at least 50% of infected individuals. The pathogenic mechanisms that result in chronic hepatitis are unknown. Lymphocytes are typically observed within the hepatic parenchyma, but the functional characteristics of these cells have not been defined. In this study, liver-infiltrating lymphocytes from two subjects with chronic HCV hepatitis were cloned at limiting dilution and tested for HCV-specific cytolytic activity using autologous target cells infected with vaccinia viruses expressing recombinant HCV Ag or sensitized with synthetic HCV peptides. In both subjects, HCV-specific, HLA class I-restricted CTL were identified that recognized epitopes in variable regions of either the envelope or nonstructural proteins. These results demonstrate the presence of HCV-specific CTL at the site of tissue damage in persons with chronic HCV hepatitis, and provide a means to evaluate the possible pathogenic role of these cells in HCV infection.