We recently identified a cell-factor, ErbB3 binding protein 1 (Ebp-1), which specifically interacts with the viral RNA genome and modulates HCV replication and translation. Ebp1 has two isoforms, p48, and p42, that result from differential splicing. We found that both isoforms interact with HCV proteins NS5A and NS5B, as well as cell-factor PKR. The p48 isoform, which localizes in the cytoplasm and nuclei, promoted HCV replication, whereas the shorter p42 isoform, which resides exclusively in the cytoplasm, strongly inhibited HCV replication. Transient expression of individual isoforms in Ebp1-knockdown MH14 cells confirmed that the p48 isoform promotes HCV replication, while the p42 isoform inhibits it. We found that Ebp1-p42 significantly enhanced autophosphorylation of PKR, while Ebp1-p48 isoform strongly inhibited it. We propose that modulation of autophosphorylation of PKR by p48 isoform is an important mechanism whereby the HCV virus escapes innate antiviral immune responses by circumventing p42-mediated inhibition of its replication.