Chronic hepatitis C virus (HCV) infection eventually leads to cirrhosis in 20-30% of patients and to hepatocellular carcinoma (HCC) in 1-5% of patients. Rates of sustained virological response with standard interferon-alpha (IFN-alpha) are low in patients without cirrhosis (generally < 20%) and are even lower in those with cirrhosis. Combination therapy with IFN and ribavirin improves response rates in patients with chronic hepatitis C without cirrhosis, and the results from subgroups of HCV-infected patients with advanced fibrosis or cirrhosis are encouraging. Importantly, treatment with IFN slows progression of liver fibrosis, regardless of HCV genotype or early response to therapy, and reduces the risk of HCC by two- to fivefold. The risk of development of HCC is also lower in patients who show at least a partial response to IFN therapy compared with those who show no response. There is a clear need for more definitive studies of treatment in patients with chronic hepatitis C and cirrhosis, ideally using therapies with greater efficacy. Nonetheless, based on the potential to slow the progression of liver fibrosis (regardless of treatment response) and to reduce the risk of HCC, a greater number of HCV-infected patients with cirrhosis should be considered as candidates for IFN treatment. Preliminary data indicate that pegylated IFNs have improved virological response rates and may have additional clinical benefits in the prevention or reduction of fibrosis and retardation of progression of cirrhosis and HCC in these patients.