Patients with chronic hepatitis C (n = 103) were treated for 24 weeks with interferon alfa 2b and followed up for 24 weeks after cessation of therapy (week 48). When hepatitis C virus (HCV) RNA at week 48 was used to assess interferon response, 15 (14.6%) were virological complete responders, and all have remained HCV RNA negative for a mean of 3 years. At week 48, 3 of 15 virological complete responders had elevated alanine transaminase (ALT) values. When serum ALT level was used at week 48 to determine response to interferon, 20 (19.4%) were biochemical complete responders. However, 8 of the 20 patients with normal ALT levels were HCV RNA positive at week 48, and 7 of these individuals have had a recurrence of elevated ALT levels within 3 years after cessation of treatment. These findings indicate that measurement of HCV RNA was more accurate than ALT in determining true responses to interferon therapy. Identification of nonresponders early during the course of interferon treatment showed that an elevated ALT level at week 12 was 92% predictive (odds ratio 3.7) but misidentified 33% (5 of 15) of the patients who were virological complete responders at week 48. In contrast, a positive HCV RNA at week 12 of treatment was 98% predictive (odds ratio 35.5) and misidentified only 6.7% (1 of 15) of the virological complete responders. Thus, positive HCV RNA at week 12 of therapy was more accurate in identifying eventual virological nonresponders than measurement of ALT at this time. Termination of interferon therapy in patients who were HCV RNA positive at week 12 would result in a 27% reduction in the direct medical costs and keep patients from undergoing unnecessary treatment. Therefore, testing for HCV RNA at week 12 to identify nonresponders and then discontinuing their treatment is practical, cost-efficient and beneficial both to patients and to third-party payers.