Persistence of hepatitis C virus (HCV) infection is observed only in a subset of infected individuals and among them only some respond to treatment. Genome-wide association studies (GWAS) carried out around the world identified single nucleotide polymorphisms (SNPs) in the IL28B locus that are strongly associated with both HCV clearance and treatment response. The functional significance of these associations however, is not clear. In this report we show that an SNP rs28416813 in the distal promoter region of IL28B that is in close proximity to a non-consensus NF-κB-binding site affects downstream reporter gene expression. The effect is likely due to differential binding of NF-κB at the non-consensus site. The non-protective allele showed a reduction in luciferase reporter gene expression compared to the protective allele in HEK293T cells under different experimental conditions including treatment with tumor necrosis factor alpha (TNF-α) and 5' triphosphorylated dsRNA. Furthermore, the HCV RNA polymerase was able to induce transcription from the IL28B promoter in a RIG-I-dependent manner. This induction was influenced by the alleles present at rs28416813. We also demonstrate strong linkage disequilibrium between rs28416813 and another important SNP rs12979860 in two ethnic populations. These results suggest possible mechanisms by which SNPs at the IL28B locus influence spontaneous clearance and treatment response in chronic HCV infections.