Hepatitis C virus (HCV) is a major cause of chronic liver disease, cirrhosis, and hepatocellular carcinoma worldwide. HCV has a positive-strand RNA genome of about 9.4 kb in size, which serves as a template for replication and for translation of a polyprotein of about 3,000 amino acids. The polyprotein is cleaved co- and posttranslationally by cellular and viral proteases into at least 10 different mature proteins. One of these proteins, nonstructural protein 3 (NS3), has serine protease and NTPase/RNA helicase activity. Arginine 467 in the helicase domain of NS3 (arginine 1493 in the polyprotein) can be methylated by protein arginine methyltransferase 1 (PRMT1). Here we report that the methylation of NS3 inhibits the enzymatic activity of the helicase. Furthermore, we found that PRMT1 activity itself is regulated by protein phosphatase 2A (PP2A). PP2A inhibits PRMT1 enzymatic activity and therefore increases the helicase activity of NS3. This is important, because we found an increased expression of PP2A in cell lines with inducible HCV protein expression, in transgenic mice expressing HCV proteins in hepatocytes, and in liver biopsy samples from patients with chronic hepatitis C. Interestingly, up-regulation of PP2A not only modulates the enzymatic activity of an important viral protein, NS3 helicase, but also interferes with the cellular defense against viruses by inhibiting interferon-induced signaling through signal transducer and activator of transcription 1 (STAT1). We conclude that up-regulation of PP2A might be crucial for the efficient replication of HCV and propose PP2A as a potential target for anti-HCV treatment strategies.