Correlation between sequence variation of hepatitis C virus (HCV) and development of hepatocellular carcinoma (HCC) has not yet been demonstrated. In the present study, we analyzed sequence diversity of the NS3 protein of HCV and its possible correlation with HCC. On the basis of secondary structure of an amino-terminal portion of NS3, HCV subtype lb (HCV-1b) isolates were classified into two groups, A and B. Group A isolates were found in 4 (11%) of 36 patients with HCC, and 22 (63%) of 35 patients without HCC. On the other hand, group B isolates were found in 32 (89%) of 36 patients with HCC, and 12 (34%) of 35 patients without HCC. The distribution patterns of those groups were significantly different between patients with and without HCC (P< 0.001). HCV isolates of group B were found in both tumor and adjacent non-tumor tissues obtained from patients with HCC, suggesting that the emergence of group B isolates was not a result of, but rather a possible causative factor for development of HCC. Taken together, our present results suggest that HCV-lb strains of group B are highly associated with HCC and that the secondary structure analysis of NS3 would be useful to predict high risk for development of HCC in HCV-lb-infected patients.