Clonal rearrangements of Ig heavy chain (IgH) genes and hepatitis C virus (HCV) genomic sequences were assayed on intrahepatic B lymphocytes isolated from HCV chronically infected patients with and without type II mixed cryoglobulinemia (MC). Liver tissue samples from eight patients with and nine without MC were subjected to routine histologic studies, immunophenotyping, and genotypic analysis including IgH V-D-J region gene rearrangements by PCR. RT-PCR, signal amplification by branched DNA assay, and in situ hybridization technique were used to detect and quantitate HCV RNA genomic sequences in selected B cells purified from each tissue sample. Although HCV infection of intrahepatic B cells was shown in all patients both with and without MC, frank B cell monoclonal and oligoclonal patterns were found in only three and four patients with MC, respectively. No monoclonal profile was seen in the noncryoglobulinemic patients, whereas an oligoclonal profile was demonstrated in four of them. No clonalities were shown in HCV-unrelated patients matched for age and severity of liver disease. No obvious difference in HCV genotype distribution was found in relation to the clonal expansion profile. Noncryoglobulinemic patients showing clonal expansion in liver tissue had higher titers of serum rheumatoid factor (RF). Spontaneous production of RF was shown in cell cultures of intrahepatic B cells, suggesting their persistent stimulation in vivo. These data indicate that HCV infection of B cells and B cell clonal expansions occur in the liver microenvironment and preferentially involve RF-producing cells.