Compared to HCV non-diabetics, HCV diabetics were more likely to have steatosis (P<0.0001) and advanced fibrosis (P=0.003). Patients' age, Caucasian ethnicity, obesity, and histologic activity index were independently associated with advanced fibrosis (P<0.05). Only 23% of HCV diabetics achieved SVR compared to 46% of HCV non-diabetics (P=0.003). DM, genotype 1, high baseline viral load, and African- American ethnicity were independently associated with less SVR (P<0.05). Significant adverse events were more common in HCV diabetics compared to HCV non-diabetics (P=0.001). Side effects did not increase in patients receiving PEG IFN/RBV and insulin sensitizers. Conclusion DM was associated with impaired virologic response to PEG IFN/RBV in HCV patients. Adverse events during therapy were more frequent in diabetic compared to non-diabetic HCV patients.