Claudin-1 (CLDN1), a tight junction (TJ) protein, has recently been identified as an entry co-receptor for hepatitis C virus (HCV). Ectopic expression of CLDN1 rendered several non-hepatic cell lines permissive to HCV infection. However, little is known about the mechanism by which CLDN1 mediates HCV entry. It is believed that an additional entry receptor(s) is required because ectopic expression of CLDN1 in both HeLa and NIH3T3 cells failed to confer susceptibility to viral infection. Here we found that CLDN1 was co-immunoprecipitated with both HCV envelope proteins when expressed in 293T cells. Results from biomolecular fluorescence complementation assay showed that overexpressed CLDN1 also formed complexes with CD81 and low density lipoprotein receptor. Subsequent imaging analysis revealed that CLDN1 was highly enriched at sites of cell-cell contact in permissive cell lines, co-localizing with the TJ marker, ZO-1. However, in both HeLa and NIH3T3 cells the ectopically expressed CLDN1 appeared to reside predominantly in intracellular vesicles. The CLDN1-CD81 complex formed in HeLa cells was also exclusively distributed intracellularly, co-localizing with EEA1, an early endosomal marker. Correspondingly, transepithelial electric resistance, obtained from the naturally susceptible human liver cell line, Huh7, was much higher than that of the HeLa-CLDN1 cell line, suggesting that Huh7 is likely to form functional tight junctions. Finally, the disruption of TJ-enriched CLDN1 by tumor necrosis factor-alpha treatment markedly reduced the susceptibility of Huh7.5.1 cells to HCV infection. Our results suggest that the specific localization pattern of CLDN1 may be crucial in the regulation of HCV cellular tropism.