Clinical data suggest that iron is a negative factor in chronic hepatitis C; however, the molecular mechanisms by which iron modulates the infectious cycle of hepatitis C virus (HCV) remain elusive. To explore this, we utilized cells expressing a HCV replicon as a well-established model for viral replication. We demonstrate that iron administration dramatically inhibits the expression of viral proteins and RNA, without significantly affecting its translation or stability. Experiments with purified recombinant HCV RNA polymerase (NS5B) revealed that iron binds specifically and with high affinity (apparent Kd: 6 and 60 microM for Fe2+ and Fe3+, respectively) to the protein's Mg2+-binding pocket, thereby inhibiting its enzymatic activity. We propose that iron impairs HCV replication by inactivating NS5B and that its negative effects in chronic hepatitis C may be primarily due to attenuation of antiviral immune responses. Our data provide a direct molecular link between iron and HCV replication.