Studies on hepatitis C virus (HCV) replication have been greatly advanced by the development of cell culture models for HCV known as replicon systems. The prototype replicon consists of a subgenomic HCV RNA in which the HCV structural region is replaced by the neomycin phosphotransferase II (NPTII) gene, and translation of the HCV proteins NS3 to NS5 is directed by the encephalomyocarditis virus (EMCV) internal ribosome entry site (IRES). The interferon (IFN)-inducible protein kinase PKR plays an important role in cell defense against virus infection by impairing protein synthesis as a result of eIF-2alpha phosphorylation. Here, we show that expression of the viral nonstructural (NS) and PKR proteins and eIF-2alpha phosphorylation are all variably regulated in proliferating replicon Huh7 cells. In proliferating cells, induction of PKR protein by IFN-alpha is inversely proportional to viral RNA replication and NS protein expression, whereas eIF-2alpha phosphorylation is induced by IFN-alpha in proliferating but not in serum-starved replicon cells. The role of PKR and eIF-2alpha phosphorylation was further addressed in transient-expression assays in Huh7 cells. These experiments demonstrated that activation of PKR results in the inhibition of EMCV IRES-driven NS protein synthesis from the subgenomic viral clone through mechanisms that are independent of eIF-2alpha phosphorylation. Unlike NS proteins, HCV IRES-driven NPTII protein synthesis from the subgenomic clone was resistant to PKR activation. Interestingly, activation of PKR could induce HCV IRES-dependent mRNA translation from dicistronic constructs, but this stimulatory effect was mitigated by the presence of the viral 3' untranslated region. Thus, PKR may assume multiple roles in modulating HCV replication and protein synthesis, and tight control of PKR activity may play an important role in maintaining virus replication and allowing infection to evade the host's IFN system.