Ribozymes are small catalytic RNA molecules that can be engineered to enzymatically cleave RNA transcripts in a sequence-specific fashion and thereby inhibit expression and function of the corresponding gene product. With their simple structures and site-specific cleavage activity, they have been exploited as potential therapeutic agents in a variety of human disorders, including hepatitis C virus (HCV) infection. We have designed a hairpin ribozyme ( Ribozymes are small catalytic RNA molecules that hybridize to complementary sequences of a particular target mRNA and that can be engineered to enzymatically cleave and destroy RNA transcripts in a sequence-specific fashion, thereby preventing expression and function of the corresponding gene product. Ribozymes have been studied in connection with a variety of diseases and human disorders as potential therapeutic molecules (for recent reviews see references 2, 9, 15, 19, and 22). Hairpin ribozymes fold into a two-dimensional hairpin structure, consisting of a small catalytic region with four helical domains (see Fig. 1A). Based on Watson-Crick base pairing, the ribozyme binding arms (helices 1 and 2) hybridize to sequences flanking the cleavage site (GUC) within the target RNA, thereby determining specificity of the recognized target sequence.Recently, we introduced a novel "inverse genomics" procedure based on a retrovirus hairpin ribozyme library with randomized target recognition sequences for gene discovery in different experimental systems. These include (i) genes regulating the BRCA1 promoter (3), (ii) cellular genes mediating hepatitis C virus (HCV) internal ribosome entry site (IRES) activity (14), (iii) genes involved in anchorage-independent cell growth control (23), and (iv) genes involved in suppression of fibroblast transformation (16). Ribozymes that repeatedly conferred distinct cellular phenotypes were selected in these systems. Single ribozyme candidates were identified, and the binding sequence flanking the GUC site required for ribozyme cleavage was exploited to identify partial sequence information of the target gene responsible for the observed phenotype. For the HCV IRES project, a cellular selection scheme was developed using a reporter system based on herpes simplex virus (HSV) thymidine kinase (TK) as a negative selectable marker under translational control of the HCV IRES (14). This cellular selection system allowed the identification of ribozymes that actively inhibited HCV IRES-mediated translation of HSV TK and thereby conferred a ganciclovir (GCV)-resistance phenotype. By using the ribozyme binding sequences, potential cellular cofactors for HCV IRES were discovered (14). For these experiments, Rz3ЈX, a hairpin ribozyme engineered against the minus-strand HCV replication intermediate at position 40 within the terminal 98-nucleotide (nt) (3ЈX tail)