Interleukin-7 (IL-7) is required for the establishment and maintenance of memory CD4(+) and CD8(+) T lymphocytes, and cells lacking IL-7Ralpha (CD127) demonstrate impaired IL-2 secretion and have a short life-span. Chronic HCV is characterized by T cells that are functionally impaired and exhibit an immature phenotype. To investigate the potential role of IL-7/IL-7Ralpha in the outcome of HCV infection, we used multiparameter flow cytometry to characterize patients with acute infection (n = 24), long-term chronic infection (12) and normal subjects (13). HCV infection per se resulted in downregulation of CD127 on total CD4(+) and CD8(+) T lymphocytes as compared to normal controls. Total expression was lowest in those patients who subsequently developed persistence and intermediate in those patients with acute-resolving infection. This reduction affected both naïve and effector/memory T cells. CD127 correlated phenotypically with upregulation of chemokine receptors CCR7 and CXCR4, expression of the anti-apoptotic molecule B cell leukemia/lymphoma 2 (Bcl-2), and enhanced IL-2 production. In six HLA A2-positive patients, we longitudinally tracked tetramer responses to HCV and CMV epitopes; at baseline, reflecting the expression of CD127 on whole T cell populations, viral-specific CTLs in patients who became chronic demonstrated lower CD127. In conclusion, CD127 is a useful marker of functional CD4(+) and CD8(+) T cells and its expression correlates with virologic outcome of acute HCV. These data provide a mechanistic basis for the observation that CTLs generated in early infection rapidly decline as chronicity is established; CD127 expression should be considered in the design of novel immunotherapeutic approaches.