The only effective and approved therapy for chronic hepatitis C is interferon-alpha. Because sustained response rates with interferon alone are disappointingly low, multidrug treatment regimens are currently being investigated. Ursodeoxycholic acid has been used in other chronic liver diseases and can limit hepatocyte injury. To evaluate the potential benefit of ursodeoxycholic acid in combination with interferon-alpha for the treatment of chronic hepatitis C, we conducted a prospective, double-blinded, randomized, placebo-controlled trial comparing the combination therapy of interferon-alpha 2b and ursodeoxycholic acid with interferon alone. Thirty-one patients with chronic hepatitis C were randomized to receive 3 million units of interferon-alpha 2b subcutaneously three times per week and either 13 to 15 mg/kg/day ursodeoxycholic acid or placebo orally for 6 months. The 6-month treatment period was followed by 6 months of observation. Biochemical normalization at the end of treatment occurred in 5 of 14 (36%) patients receiving monotherapy versus 8 of 15 (53%) patients (p = 0.34) receiving combination therapy. No patient treated with interferon alone had a sustained biochemical response 6 months after therapy; however, 3 of 12 patients (25%) treated with combination interferon and ursodeoxycholic acid maintained biochemical normalization at 6 months after therapy (p = 0.08). No difference in liver histology or clearance of hepatitis C viral RNA was noted 6 months after treatment. We conclude that combination therapy with ursodeoxycholic acid and interferon-alpha 2b was no more effective than interferon monotherapy in inducing a biochemical response in previously untreated patients with chronic hepatitis C. Ursodeoxycholic acid, however, may be useful in prolonging the biochemical response to interferon therapy.