The nonstructural protein 5B (NS5B) of hepatitis C virus (HCV) is considered to possess RNA-dependent RNA polymerase (RdRp) activity and to play an essential role for the viral replication. In this study, we expressed the NS5B protein of 65 kd by a recombinant baculovirus. With the highly purified NS5B protein, we established an in vitro system for RdRp activity by using poly(A) as a template and a 15-mer oligo(U) (oligo(U)15) as a primer. Optimal conditions of temperature and pH for primer-dependent polymerase activity of the NS5B were 32 degrees C and pH 8.0. The addition of 10 mmol of Mg2+ increased the activity. The importance of three motifs conserved in RdRp among other positive-strand RNA viruses was confirmed by introduction of an Ala residue to every amino acid of the motifs by site-directed mutagenesis. All mutants lost RdRp activity, but retained the RNA binding activity, except one mutant at Thr287/Asn291. Deletion mutant analysis indicated that the N-terminal region of NS5B protein was critical for the RNA binding. Inhibition of RdRp activity by (-)beta-L-2', 3'-dideoxy-3'-thiacytidine 5'-triphosphate (3TC; lamivudine triphosphate) and phosphonoacetic acid (PAA) was observed after screening of nucleoside analogs and known polymerase inhibitors. These data provide us not only important clues for understanding the mechanism of HCV replication, but also a new target of antiviral therapy.