ABSTRACT Pegylated alpha interferon and ribavirin therapy for hepatitis C virus (HCV) genotype 1 infection fails for half of Caucasian American patients (CA) and more often for African Americans (AA). The reasons for these low response rates are unknown. HCV is highly genetically variable, but it is unknown how this variability affects response to therapy. To assess effects of viral diversity on response to therapy, the complete pretreatment genotype 1 HCV open reading frame was sequenced using samples from 94 participants in the Virahep-C study. Sequences from patients with >3.5 log declines in viral RNA levels by day 28 (marked responders) were more variable than those from patients with declines of <1.4 log (poor responders) in NS3 and NS5A for genotype 1a and in core and NS3 for genotype 1b. These correlations remained when all T-cell epitopes were excluded, indicating that these differences were not due to differential immune selection. When the sequences were compared by race of the patients, higher diversity in CA patients was found in E2 and NS2 but only for genotype 1b. Core, NS3, and NS5A can block the action of alpha interferon in vitro; hence, these genetic patterns are consistent with multiple amino acid variations independently impairing the function of HCV proteins that counteract interferon responses in humans, resulting in HCV strains with variable sensitivity to therapy. No evidence was found for novel HCV strains in the AA population, implying that AA patients may be infected with a higher proportion of the same resistant strains that are found in CA patients.