Persistent infections with hepatitis C virus (HCV) may result in life-threatening liver disease, including cirrhosis and cancer, and impose an important burden on human health. Understanding how the virus is capable of achieving persistence in the majority of those infected is thus an important goal. Although HCV has evolved multiple mechanisms to disrupt and block cellular signaling pathways involved in the induction of interferon (IFN) responses, IFN-stimulated gene (ISG) expression is typically prominent in the HCV-infected liver. Here, we show that Toll-like receptor 3 (TLR3) expressed within uninfected hepatocytes is capable of sensing infection in adjacent cells, initiating a local antiviral response that partially restricts HCV replication. We demonstrate that this is dependent upon the expression of class A scavenger receptor type 1 (MSR1). MSR1 binds extracellular dsRNA, mediating its endocytosis and transport toward the endosome where it is engaged by TLR3, thereby triggering IFN responses in both infected and uninfected cells. RNAi-mediated knockdown of MSR1 expression blocks TLR3 sensing of HCV in infected hepatocyte cultures, leading to increased cellular permissiveness to virus infection. Exogenous expression of Myc-MSR1 restores TLR3 signaling in MSR1-depleted cells with subsequent induction of an antiviral state. A series of conserved basic residues within the carboxy-terminus of the collagen superfamily domain of MSR1 are required for binding and transport of dsRNA, and likely facilitate acidification-dependent release of dsRNA at the site of TLR3 expression in the endosome. Our findings reveal MSR1 to be a critical component of a TLR3-mediated pattern recognition receptor response that exerts an antiviral state in both infected and uninfected hepatocytes, thereby limiting the impact of HCV proteins that disrupt IFN signaling in infected cells and restricting the spread of HCV within the liver.