Interferon regulatory factor‐3 (IRF‐3) activation directs α/β interferon production and interferon‐stimulated gene (ISG) expression, which limits virus infection. Here, we examined the distribution of hepatitis C virus (HCV) nonstructural 3 protein, the status of IRF‐3 activation, and expression of IRF‐3 target genes and ISGs during asynchronous HCV infection in vitro and in liver biopsies from patients with chronic HCV infection, using confocal microscopy and functional genomics approaches. In general, asynchronous infection with HCV stimulated a low‐frequency and transient IRF‐3 activation within responsive cells in vitro that was associated with cell‐to‐cell virus spread. Similarly, a subset of HCV patients exhibited the nuclear, active form of IRF‐3 in hepatocytes and an associated increase in IRF‐3 target gene expression in hepatic tissue. Moreover, ISG expression profiles formed disease‐specific clusters for HCV and control nonalcoholic fatty liver disease patients, with increased ISG expression among the HCV patients. We identified the presence of T cell and plasmacytoid dendritic cell infiltrates within all biopsy specimens, suggesting they could be a source of hepatic interferon in the setting of hepatitis C and chronic inflammatory condition. Conclusion: These results indicate that HCV can transiently trigger IRF‐3 activation during virus spread and that in chronic HCV, IRF‐3 activation within infected hepatocytes occurs but is limited. (HEPATOLOGY 2007.)