The combination of pegylated interferon (PEG‐IFN) and ribavirin is the standard treatment for chronic hepatitis C. Our recent clinical study suggests that ribavirin augments the induction of interferon‐stimulated genes (ISGs) in patients treated for hepatitis C virus (HCV) infection. In order to further characterize the mechanisms of action of ribavirin, we examined the effect of ribavirin treatment on ISG induction in cell culture. In addition, the effect of ribavirin on infectious HCV cell culture systems was studied. Similar to interferon (IFN)‐α, ribavirin potently inhibits JFH‐1 infection of Huh7.5.1 cells in a dose‐dependent manner, which spans the physiological concentration of ribavirin in vivo. Microarray analysis and subsequent quantitative polymerase chain reaction assays demonstrated that ribavirin treatment resulted in the induction of a distinct set of ISGs. These ISGs, including IFN regulatory factors 7 and 9, are known to play an important role in anti‐HCV responses. When ribavirin is used in conjunction with IFN‐α, induction of specific ISGs is synergistic when compared with either drug applied separately. Direct up‐regulation of these antiviral genes by ribavirin is mediated by a novel mechanism different from those associated with IFN signaling and intracellular double‐stranded RNA sensing pathways such as RIG‐I and MDA5. RNA interference studies excluded the activation of the Toll‐like receptor and nuclear factor κB pathways in the action of ribavirin. Conclusion: Our study suggests that ribavirin, acting by way of a novel innate mechanism, potentiates the anti‐HCV effect of IFN. Understanding the mechanism of action of ribavirin would be valuable in identifying novel antivirals (HEPATOLOGY 2011.)