Detection of hepatic hepatitis C virus RNA and antigens is difficult since their expression is very low. The technique of in situ reverse transcription polymerase chain reaction (IS-RT-PCR) was developed for the detection and localization of HCV RNA in formalin-fixed paraffin-embedded liver sections. Key steps for achieving a good signal-to-background ratio include appropriate proteolytic digestion, DNase pretreatment, higher Mg2+ concentration, primers from the core region, "hot-start", and between 10-20 cycles of PCR. Using this approach, HCV RNA was detected in the liver in four of the six patients. In those positive samples, the percentage of cells positive for HCV RNA ranges from < 5 to 25%. Using RT-PCR of serum samples and RNA extracted from the corresponding tissue block (10 sections) as the gold standard and sections from four control subjects as negative controls, the sensitivity and specificity of this assay was 4/6 and 4/4, respectively. The specific positive signal was found mainly in the cytoplasm of the hepatocytes and occasionally in mononuclear cells but not in the bile duct epithelium or sinusoidal cells. These positive hepatocytes were scattered in the liver lobules with occasional clustering. These preliminary data confirm the hepatotropic nature of HCV and the localization of HCV RNA is consistent with cytoplasmic replication.