The hepatitis C virus (HCV) NS3 protease is essential for polyprotein maturation and viral propagation, and it has been proposed as a suitable target for antiviral drug discovery. An N-terminal hexapeptide cleavage product of a dodecapeptide substrate identified as a weak competitive inhibitor of the NS3 protease activity was optimized to a potent and highly specific inhibitor of the enzyme. The effect of this potent NS3 protease inhibitor was evaluated on replication of subgenomic HCV RNA and compared with interferon-alpha (IFN-alpha), which is currently used in the treatment of HCV-infected patients. Treatment of replicon-containing cells with the NS3 protease inhibitor or IFN-alpha showed a dose-dependent decrease in subgenomic HCV RNA that reached undetectable levels following a 14-day treatment. Kinetic studies in the presence of either NS3 protease inhibitor or IFN-alpha also revealed similar profiles in HCV RNA decay with half-lives of 11 and 14 h, respectively. The finding that an antiviral specifically targeting the NS3 protease activity inhibits HCV RNA replication further validates the NS3 enzyme as a prime target for drug discovery and supports the development of NS3 protease inhibitors as a novel therapeutic approach for HCV infection.