In an effort to clarify the life cycle of HCV, the HCV genome in liver biopsies taken from chronic active hepatitis C patients undergoing interferon treatment was investigated. Molecular cloning by long distance reverse-transcription polymerase chain reaction (RT-PCR) revealed that the HCV genome in two patients with high viral loads in the liver had in-frame deletions of approximately 2 kb between E1 and NS2, which encode the E1-NS2 fusion protein and six other HCV proteins: core, NS3, NS4A, NS4B, NS5A, and NS5B. Among the remaining 21 chronic active hepatitis C patients, these types of deletion were found in another two patients and in two hepatocellular carcinoma patients. Out-of-frame deletions in the structural region were isolated from the other five patients, but the dominant RT-PCR products were non-truncated genomes. Retrospective analysis of a series of serum samples taken from a patient carrying the subgenome with the in-frame deletion revealed that both the subgenome and the full genome persisted through the 2-year period of investigation, with the subgenome being predominant during this period. Sequence analysis of the isolated cDNA suggested that both the subgenome and the full genome evolved independently. Western blotting analysis of HCV proteins from the HCV subgenome indicated that they were processed in the same way as those from the full genome. HCV subgenomes thus appear to be involved in the HCV life cycle.