To clarify the mechanism of liver damage induced by hepatitis C virus (HCV) and to determine whether the damage is related to hepatocellular carcinoma (HCC), HCV RNA levels were measured serially, and HCV genome mutations were analyzed from serum of 274 Japanese patients with chronic HCV viremia during 1993-1998. All patients had alanine aminotransferase (ALT) levels measured during 1986-1998. Patients with consistently normal ALT levels had identical and highly conserved HCV core regions; however, those with consistently abnormal ALT levels had quasi species, and the population of the quasi species changed over time. HCV RNA levels did not change in the 274 patients. HCC developed in 31% of 80 patients with consistently abnormal ALT levels and in 4% of 92 patients with intermittently abnormal ALT levels but never in 102 patients with ALT levels consistently normal during 1993-1998. In patients with chronic HCV viremia, persistent liver damage plays an important role in the development of HCC.