Telaprevir (VX-950) is a highly selective, potent inhibitor of the hepatitis C virus (HCV) NS3•4A serine protease. It has demonstrated strong antiviral activity in patients chronically infected with genotype 1 HCV when dosed alone or in combination with peginterferon alfa 2a. Substitutions of Arg¹⁵⁵ of the HCV NS3 protease domain have been previously detected in HCV isolates from some patients during telaprevir dosing. In this study, Arg¹⁵⁵ was replaced with various residues in genotype 1a protease domain proteins and in genotype 1b HCV subgenomic replicons. Characterization of both the purified enzymes and reconstituted replicon cells demonstrated that substitutions of Arg¹⁵⁵ with these residues conferred low-level resistance to telaprevir (<25-fold). An X-ray structure of genotype 1a HCV protease domain with the R155K mutation, in a complex with an NS4A co-factor peptide, was determined at a resolution of 2.5 Å. The crystal structure of the R155K protease is essentially identical to that of the wild-type apo-enzyme (PDB: 1A1R) except for the side-chain of mutated residue 155. Telaprevir was docked into the X-ray structure of the R155K protease, and modeling analysis suggests that the P2 group of telaprevir loses several hydrophobic contacts with the Lys¹⁵⁵ side-chain. It was demonstrated that replicon cells containing substitutions at NS3 protease residue 155 remain fully sensitive to interferon alpha (IFN-) or ribavirin. Finally, these variant replicons were shown to have reduced replication capacity compared to the wild-type HCV replicon in cells.