Hepatitis C is a predominantly chronic viral infection, affecting 1-3% of the world population. The causative agent, the hepatitis C virus (HCV), has a positive strand-RNA genome that is utilized, in infected cells, as an mRNA to drive the synthesis of a large polyprotein precursor. This precursor subsequently undergoes proteolytic maturation to generate all of the functional, both structural and nonstructural proteins necessary for viral replication and assembly. The proteolytic activity that is responsible for the generation of the mature viral polymerase as well as for most of the cleavages occurring in the nonstructural region of the polyprotein is expressed by the virus itself and is contained in its nonstructural protein 3 (NS3). Here, the N-terminal 180 amino acids form a chymotrypsin-like serine protease domain. Full activation of this protease is achieved only after complexation with another viral protein, the cofactor protein NS4A. Together, NS3 and NS4A form the active, heterodimeric serine protease that presently is the target of medicinal chemistry efforts aiming at the development of inhibitors with potential antiviral activity. We here review the recent progress in our understanding of the structure and function of the enzyme and in the development of selective and potent NS3 protease inhibitors.