Chronic hepatitis C virus (HCV) infection is a leading cause of liver disease. Liver inflammation underlies infection-induced fibrosis, cirrhosis and liver cancer but the processes that promote hepatic inflammation by HCV are not defined. We provide a systems biology analysis with multiple lines of evidence to indicate that interleukin-1β (IL-1β) production by intrahepatic macrophages confers liver inflammation through HCV-induced inflammasome signaling. Chronic hepatitis C patients exhibited elevated levels of serum IL-1β compared to healthy controls. Immunohistochemical analysis of healthy control and chronic hepatitis C liver sections revealed that Kupffer cells, resident hepatic macrophages, are the primary cellular source of hepatic IL-1β during HCV infection. Accordingly, we found that both blood monocyte-derived primary human macrophages, and Kupffer cells recovered from normal donor liver, produce IL-1β after HCV exposure. Using the THP-1 macrophage cell-culture model, we found that HCV drives a rapid but transient caspase-1 activation to stimulate IL-1β secretion. HCV can enter macrophages through non-CD81 mediated phagocytic uptake that is independent of productive infection. Viral RNA triggers MyD88-mediated TLR7 signaling to induce IL-1β mRNA expression. HCV uptake concomitantly induces a potassium efflux that activates the NLRP3 inflammasome for IL-1β processing and secretion. RNA sequencing analysis comparing THP1 cells and chronic hepatitis C patient liver demonstrates that viral engagement of the NLRP3 inflammasome stimulates IL-1β production to drive proinflammatory cytokine, chemokine, and immune-regulatory gene expression networks linked with HCV disease severity. These studies identify intrahepatic IL-1β production as a central feature of liver inflammation during HCV infection. Thus, strategies to suppress NLRP3 or IL-1β activity could offer therapeutic actions to reduce hepatic inflammation and mitigate disease.