The serine proteinase of hepatitis C virus (HCV) non-structural protein NS3 was efficiently expressed in an active form as a fused protein with oligohistidine in Escherichia coli. The recombinant fusion protein was purified to near homogeneity by affinity chromatography on a metal chelation column. Trans-cleavage activity of this protein was investigated by using the substrate NS5 protein expressed in insect cells. The purified serine proteinase trans-cleaved the partially purified NS5 protein. In contrast, the NS3 proteins with mutations at the proposed catalytic site, Ser1165 or His1083, lost the trans-cleavage activity. Analysis of the authentic enzyme and variants with site-directed mutations provides a useful tool for understanding the structure-function relationship of the NS3 serine proteinase. We then developed an in vivo trans-cleavage assay system by coexpression of the NS3 proteinase and the NS5 substrate in E coli, and examined the effect of known inhibitors of serine proteinase. Inhibition of its proteolytic activity by N-p-tosyl-L-lysine chloromethyl ketone (TLCK) was observed, but only at high concentrations. The in vitro and in vivo trans-cleavage assays for NS3 serine proteinase will facilitate efficient testing for inhibitors of the replication of HCV and specific treatment for hepatitis C.