T7 RNA polymerase transcripts of a putative full-length cDNA clone of hepatitis C virus type 1 (HCV-1) were used to transfect a differentiated human hepatoma cell line, Huh7. The transfected genome replicated in cells, as evidenced by the appearance of progeny HCV RNA, detection of negative-strand viral RNA, and incorporation of [3H]uridine into the viral genome. Incubation of naive Huh7 cells with conditioned medium from transfected cells resulted in a new HCV infection, suggesting the production of biologically active virus in the inoculum. Maintenance of the transfected cells under serum-free culture conditions resulted in the selection of persistently infected cells which displayed a distinctive cellular morphology. This is the first demonstration that HCV RNA produced from cloned HCV cDNA is infectious and replication competent. This approach should provide a valuable system for studying HCV replication, persistence, and pathogenicity.