An association between hepatitis C virus (HCV) infection and insulin resistance (IR) has been recently reported. However, causality has not been established. The cross-sectional nature of most reported studies and varying degrees of fibrosis have limited definitive conclusions about the independent role of HCV in development of IR. We sought to evaluate whether HCV induces IR by prospectively analyzing a cohort of adult liver transplant (LT) recipients. A total of 34 adults (14 HCV(+) and 20 HCV(-)) who underwent consecutive LT were followed during the first year posttransplantation. IR was estimated using the homeostasis model assessment (HOMA). Univariate and multivariate repeated measures analyses and Cox regression models were used. There were no significant differences between the groups with respect to age, body mass index (BMI), family history of diabetes, alcohol consumption, or laboratory indices. The cohort had no or minimal fibrosis. There was lower prednisone use in the HCV(+) group, and no difference in the use of tacrolimus between the two groups was found. IR was 77% higher in HCV(+) subjects during the first year post-LT when controlling for BMI (P = 0.035). Subjects with high HCV ribonucleic acid (RNA) levels reached high HOMA-IR significantly earlier than those with lower HCV RNA (P = 0.03). Following the first month post-LT, HCV(+) subjects were 4 times more likely to become diabetic than HCV(-) controls (P < 0.01). In conclusion, there is significantly higher IR in the HCV(+) group during the first year post-LT. This cannot be explained by differences in BMI, medications used, alcohol consumption, or degree of fibrosis. Higher HCV RNA levels were associated with earlier elevations in HOMA-IR. Collectively, these results provide strong evidence that HCV induces the development of IR.