The hepatitis C virus (HCV) causes a wide spectrum of liver diseases ranging from symptomatic or asymptomatic acute infection with self-limited disease to persistent infection with chronic active hepatitis and an increased risk of liver cirrhosis and hepatocellular carcinoma. The outcome of HCV infection (i.e., viral clearance or persistence) and the manifestation and degree of liver disease is the result of complicated interactions between the virus and the immune response of the host. Remarkably, most de novo HCV infections are clinically inapparent and characterized by a high incidence (70%) of chronically evolving hepatitis, which suggests that HCV may have evolved strategies to not induce, overcome, or evade efficient immune responses of the host. This may be a multifactorial process, influenced by viral tissue tropism, replication, sequence variation and by functional alteration of infected cells. The interaction between HCV and the specific humoral and cellular immune response of the host, the role of the liver as the primary site of viral replication, the target of the host's immune response, and potential mechanisms of viral escape are discussed.