ABSTRACT Small-molecule hepatitis C virus (HCV) NS3 protease inhibitors such as boceprevir (SCH 503034) have been shown to have antiviral activity when they are used as monotherapy and in combination with pegylated alpha interferon and ribavirin in clinical trials. Improvements in inhibitor potency and pharmacokinetic properties offer opportunities to increase drug exposure and to further increase the sustained virological response. Exploration of the structure-activity relationships of ketoamide inhibitors related to boceprevir has led to the discovery of SCH 900518, a novel ketoamide protease inhibitor which forms a reversible covalent bond with the active-site serine. It has an overall inhibition constant ( K * _i ) of 7 nM and a dissociation half-life of 1 to 2 h. SCH 900518 inhibited replicon RNA at a 90% effective concentration (EC ₉₀ ) of 40 nM. In biochemical assays, SCH 900518 was active against proteases of genotypes 1 to 3. A 2-week treatment with 5× EC ₉₀ of the inhibitor reduced the replicon RNA level by 3 log units. Selection of replicon cells with SCH 900518 resulted in the outgrowth of several resistant mutants (with the T54A/S and A156S/T/V mutations). Cross-resistance studies demonstrated that the majority of mutations for resistance to boceprevir and telaprevir caused similar fold losses of activity against all three inhibitors; however, SCH 900518 retained more activity against these mutants due to its higher intrinsic potency. Combination treatment with alpha interferon enhanced the inhibition of replicon RNA and suppressed the emergence of resistant replicon colonies, supporting the use of SCH 900518-pegylated alpha interferon combination therapy in the clinic. In summary, the results of the preclinical characterization of the antiviral activity of SCH 900518 support its evaluation in clinical studies.