An imbalance in Th1 and Th2 cytokine production is implicated in disease progression of HCV. Our aim was to determine the effect of IL–10 administration in patients with HCV–related liver disease. Thirty patients with advanced fibrosis who had failed antiviral therapy were enrolled in a 12–month treatment regimen with SQ IL–10 given daily or thrice weekly. Liver biopsies were performed before and after therapy. Serum and PBMC were collected for HCV RNA, ALT, and functional T–cell analysis. IL–10 led to significant improvement in serum ALT (mean ALT: day 0 = 142 ± 17 vs. month 12 = 75 ± 10;P < .05). Hepatic inflammation score decreased by at least 2 in 13 of 28 patients (mean decrease from 4.6 ± 0.3 to 3.7 ± 0.3,P < .05) and 11 of 28 showed a reduction in fibrosis score (mean change from 5.0 ± 0.2 to 4.5 ± 0.3,P < .05). Serum HCV RNA levels increased by 0.5 log during therapy (mean HCV RNA day 0: 12.3 ± 3.0 Meq/mL; 12 months: 38 Meq/mL;P < .05) and returned to baseline at the end of follow–up (11.0 ± 2.4 Meq/ml). Five patients developed viral loads of greater than 120 Meq/mL and two of these developed an acute flare in serum ALT. IL–10 caused a decrease in the number of HCV–specific CD4⁺ and CD8⁺ IFN–γ secreting T cells and alterations in PBMC cytokine production towards a Th2 dominant profile. These changes parallel the improvement in ALT and rise in HCV RNA. In conclusion, long–term rIL–10 therapy appears to decrease disease activity, but also leads to increased HCV viral burden via alterations in immunologic viral surveillance. (Hepatology 2003;38:859-868).