Hepatitis C virus (HCV) infection is a dynamic process during which molecular variants are continuously selected as the result of virus adaptation to the host. Understanding the nature of HCV genetic variation is central to current theories of pathogenesis and immune response. We prospectively studied hypervariable region 1 (HVR1) variation in the E2 gene of 36 hepatitis C patients, including 10 asymptomatic carriers, followed up for 1 to 2 years. Sequence changes in single and consecutive serum samples were assessed and correlated with clinical and virological parameters of liver disease. A region of the E1 gene was sequenced for comparison in 3 subjects. HVR1 heterogeneity at single time points widely varied in individual patients, did not increase cumulatively over the follow-up period, and did not correlate with HVR1 evolutionary rates. Conversely, the process of HVR1 sequence diversification, although differed considerably among patients, was stable over time and directly correlated with infections by HCV type 2, lower alanine aminotransferase (ALT) levels, and absence of cirrhosis. HCV carriers showed the highest HVR1 variation rates. Our findings indicate that HVR1 variation has an adaptive significance and is associated with favorable features of liver disease and suggest that prospective, rather than static, observations are required to model the process of HCV variation.