Interferon (IFN) exhibits an intrahepatic anti-inflammatory action and is involved in the elimination of HCV in viral hepatitis. We studied the histological response of IFN therapy in non-responders (NR). Studies were carried out on 110 patients who were serum HCV antibody positive, were histlogically diagnosed with chronic active hepatitis (CAH), and underwent liver biopsy before and after treatment. The degree of inflammatory cell infiltration and fibrosis was scored, and the scores were compared between responders (CR) and NR. Intrahepatic fibrosis was further advanced in 26% of NR and modified in only 7% 3 years after treatment, while it was modified in 25% of Cr. Intrahepatic fibrosis was further advanced in about half of 10 untreated patients with HCV genotype lb, who were followed for 3 years or more. The inflammatory reaction was modified by IFN in 50% of even NR. It was suggested that the progression of intrahepatic fibrosis was retarded by IFN unlike in untreated patients,though it was difficult to hold its progression in check. As a matter of fact, intrahepatic fibrosis was modified by IFN in 3 patients (7%) of NR. The result of this study suggest that IFN therapy may retard the progression of liver disease by modifying the intrahepatic inflammatory reaction irrespective of its therapeutic effect.