Pegylated interferon alpha-2, alone or in combination with ribavirin, has become the standard therapy for patients with chronic hepatitis C infection. Pegylation of interferon alpha-2 results in a substantially extended half-life that permits once-weekly dosing, because of reduced clearance and more sustained absorption. The size of PEG moiety appears to influence the relative antiviral activities of peginterferon alpha-2. Increasing the size of the polyethylene glycol (PEG) moiety results in a reduction of the specific antiviral activity of the pegylated protein. For example, peginterferon alpha-2b (12 kDa) has an in vitro antiviral specific activity 25-35-fold higher than peginterferon alpha-2a (40 kDa). The antiviral activity of pegylated interferon alpha-2 is also governed by the site of pegylation of the interferon alpha core proteins. Interferon alpha-2a is monopegylated at four major positional lysine (Lys) residues. The major site of interferon alpha-2b monopegylation is histidine (His34), with additional pegylation sites at lysine and cysteine residues. The 12 kDa pegylated His34 positional isomer of peginterferon alpha-2b has the highest antiviral and antiproliferative in vitro specific activity compared with both the 12 kDa Lys positional isomers and the 40 kDa Lys positional isomers. The correlative effects of size and site of pegylation on the JAK/STAT signalling pathway, as evidenced by differences in the formation of the Stat1 homodimer complex, are suggestive of a receptor-mediated mechanism that governs the antiviral activity of pegylated interferons. The elucidation of the in vitro effects of pegylation is important and this will ultimately have a positive impact on the in vivo efficacy of treatment for patients with hepatitis C.