Sequence variation in the putative large surface glycoprotein (E2/NS1) of hepatitis C virus (HCV) was analyzed over 18 months in 4 patients with chronic relapsing non-A, non-B liver disease, of whom 2 were treated with lymphoblastoid interferon-a. Sequence analysis showed marked heterogeneity between isolates from different patients at the hypervariable region mapping to the amino-terminus of E2/NS1 (amino acid position, 386-411) and the extended sequence analyzed again confirmed the existence of two types, HCV1 and HCV2. Sequential nucleotide analysis of the hypervariable region over 1 year for each patient showed 0-9 amino acid changes, more common in the untreated than in the interferon-α-treated patients (3 and 9 vs. 1 and 0). Peaks of raised serum transaminases in individual patients showed no consistent association with mutations within this region. However, results do not exclude the possibility that viral persistence may be due to the emergence of “escape mutants” in the hypervariable region.