The precise mechanisms responsible for the failure of intrahepatic hepatitis C virus (HCV)-specific CD8+ T cells to control the virus during persistent infection have not been fully defined. We therefore studied the CD8+ T-cell response in 27 HLA-A2-positive patients using four previously well-defined HLA-A2-restricted HCV epitopes. The corresponding HCV sequences were determined in several patients and compared with the intrahepatic HCV-specific CD8+ T-cell response. The results of the study indicate: (1) intrahepatic HCV-specific CD8+ T cells are present in the majority of patients with chronic HCV infection and overlap significantly with the response present in the peripheral blood. (2) A large fraction of intrahepatic HCV-specific CD8+ T cells are impaired in their ability to secrete interferon gamma (IFN-gamma). This dysfunction is specific for HCV-specific CD8+ T cells, since intrahepatic Flu-specific CD8+ T cells readily secrete this cytokine. (3) T-cell selection of epitope variants may have occurred in some patients. However, it is not an inevitable consequence of a functional virus-specific CD8+ T-cell response, since several patients with IFN-gamma-producing CD8+ T-cell responses harbored HCV sequences identical or cross-reactive with the prototype sequence. (4) The failure of intrahepatic virus-specific CD8+ T cells to sufficiently control the virus occurs despite the presence of virus-specific CD4+ T cells at the site of disease. In conclusion, different mechanisms contribute to the failure of intrahepatic CD8+ T cells to eliminate HCV infection, despite their persistence and accumulation in the liver.