Inclusion Criteria:

1. Men or women age 18 to 75 years.
2. Chronic hepatitis C infection based on a history of positive anti-HCV antibody and/or HCV RNA at least 6 months prior to study entry.
3. Positive HCV-RNA by Roche Amplicor HCV test at screening
4. Serum ALT > 1.5 times upper limit of normal
5. Active or past use of injection drugs or crack cocaine by self-report. Active use is defined as injection drug use at least 1/month and within 3 months of the date of randomization. Past use is defined as no injection drug use or crack cocaine use within the past 5 years.
6. Compensated liver disease
7. Negative urine or blood pregnancy tests (for women of childbearing potential) documented within 24-hours prior to first dose of study drug.
8. All fertile males and females must use effective contraception during treatment and during the 6 months after treatment end if sexually active (This will be provided free of charge to active IDUs).

Exclusion Criteria:

1. Presence of clinically evident ascites requiring active diuretic therapy, history of or therapy for hepatic encephalopathy, or history of variceal bleeding within the last two years. 2. Platelet count < 60,000/mm3 3. Serum ALT level > 10 times upper limit of normal 4. Serum creatinine level > 1.5 times the upper limit of normal 5. Hematology outside of specified limits: neutrophil count < 1000/mm3, hemoglobin < 10 g/L in males and < 9 g/L in females 7. Unstable or uncontrolled thyroid disease 8. Treatment with interferon- and/or ribavirin within the previous 12 months 9. Presence of clinically significant cryoglobulinemia vasculitis (e.g. skin rash, arthritis, or renal insufficiency due to cryoglobulinemia) 10. Presence or history of autoimmune hepatitis, alpha-1-anti-trypsin deficiency, genetic hemochromatosis, Wilson disease, drug- or toxin-induced liver disease, alcohol-related liver disease, primary biliary cirrhosis, or sclerosing cholangitis.

11. Chronic hepatitis B infection or positive HbsAg at screening 12. Known history of HIV infection or positive HIV antibody test by Western Blot.

13. A disease known to cause significant alteration in immunologic function, including hematological malignancy or autoimmune disorder.

14. Concurrent therapy with immunosuppressive drugs or cytotoxic agents, such as prednisone, cyclosporine, azathioprine or chemotherapeutic agents.

15. History of unstable or deteriorating cardiac, pulmonary or renal disease. 16. Preexisting (within last two years) or active psychiatric condition including severe untreated depression, major psychoses, suicidal ideation or suicidal attempts. 17. Severe or poorly controlled diabetes mellitus 18. Any serious or chronic disease that may affect the assessment of safety or efficacy parameters.

19. Patients who have had a liver transplant 20. Patients infected with HCV genotypes 4, 5 or 6 (< 1% of infected current/past IDUs)