Transforming growth factor- (TGF-) is implicated in the pathogenesis of liver disease. TGF- is involved both in liver regeneration and in the fibrotic and cirrhotic transformation with hepatitis viral infection. Hepatitis C virus (HCV) infection often leads to cirrhosis and hepatocellular carcinoma. HCV nonstructural 5A (NS5A) protein is a multifunctional protein and modulates cytokine-mediated signal transduction pathways. To elucidate the molecular mechanism of HCV pathogenesis, we examined the effect of NS5A protein on TGF- stimulated signaling cascades. We showed that NS5A protein inhibited TGF--mediated signaling pathway in hepatoma cell lines as determined by reporter gene assay. To further investigate the role of NS5A, we examined the protein-protein interaction between NS5A and TGF- signaling transducers. Both in vitro and in vivo binding data showed that NS5A protein directly interacted with type I TGF- receptor I (TßR-I) in hepatoma cell lines. This interaction was mapped to the amino acids 148-238 of NS5A. We also found that NS5A protein was colocalized with TßR-I in the cytoplasm of Huh7 cells and inhibited TGF--mediated nuclear translocation of Smad2. Furthermore, we demonstrated that NS5A protein abrogated phosphorylation of Smad2 and heterodimerization of Smad3 and Smad4. To further explore the relevance to the viral infection, we examined the effect of HCV subgenomic replicon on TGF- signaling pathway. Indeed, we showed that HCV subgenomic replicon also inhibited TGF--induced signaling cascades. These results indicate that HCV NS5A modulates TGF- signaling through the interaction with TbR-I and NS5A may be an important risk factor in HCV-associated liver pathogenesis.