The lack of a robust small-animal model for hepatitis C virus (HCV) has hindered the discovery and development of novel drug treatments for HCV infections. We developed a reproducible and easily accessible xenograft mouse efficacy model in which HCV RNA replication is accurately monitored in vivo by real-time, noninvasive whole-body imaging of gamma-irradiated SCID mice implanted with a mouse-adapted luciferase replicon-containing Huh-7 cell line (T7-11). The model was validated by demonstrating that both a small-molecule NS3/4A protease inhibitor (BILN 2061) and human alpha interferon (IFN-alpha) decreased HCV RNA replication and that treatment withdrawal resulted in a rebound in replication, which paralleled clinical outcomes in humans. We further showed that protease inhibitor and IFN-alpha combination therapy was more effective in reducing HCV RNA replication than treatment with each compound alone and supports testing in humans. This robust mouse efficacy model provides a powerful tool for rapid evaluation of potential anti-HCV compounds in vivo as part of aggressive drug discovery efforts.