The NS3 proteinase of hepatitis C virus utilizes NS4A as a cofactor for cleavages at four sites (3/4A, 4A/4B, 4B/5A, and 5A/5B) in the nonstructural region of the viral polyprotein. To characterize NS4A for its role in modulating the NS3 proteinase activity at various cleavage sites, synthetic peptides spanning various parts of NS4A were synthesized and tested in a cell-free trans-cleavage reaction using purified NS3 proteinase domain and polyprotein substrates. The NS3 proteinase domain was expressed in Escherichia coli, purified, denatured, and refolded to an enzymatically active form. We found that a 12-amino-acid peptide containing amino acid residues 22 to 33 in NS4A (CVVIVGRIVLSG) was sufficient for cofactor activity in NS3-mediated proteolysis. The peptide enhanced the cleavage at the NS5A/5B site and was necessary for NS3-mediated cleavage at NS4A/4B and NS4B/5A. Sequential amino acid substitution within the designated peptide identified residues I29 and I25 as critical for potential cofactor activity. We provide evidence that the NS4A peptide and the NS3 catalytic domain form an enzymatically active complex. These data suggest that the central 12-amino-acid peptide (aa 22-33) of NS4A is primarily important for the cofactor activity through complex formation with NS3, and the interaction may represent a new target for antiviral drug development.