Hepatitis C (HCV) is a major cause of liver disease, in which a third of individuals with chronic HCV infections may develop liver cirrhosis. In a chronic HCV infection, host immune factors along with the actions of HCV proteins that promote viral persistence and dysregulation of the immune system have an impact on immunopathogenesis of HCV-induced hepatitis. The genome of HCV encodes a single polyprotein, which is translated and processed into structural and nonstructural proteins. These HCV proteins are the target of the innate and adaptive immune system of the host. Retinoic acid-inducible gene-I (RIG-I)-like receptors and Toll-like receptors are the main pattern recognition receptors that recognize HCV pathogen-associated molecular patterns. This interaction results in a downstream cascade that generates antiviral cytokines including interferons. The cytolysis of HCV-infected hepatocytes is mediated by perforin and granzyme B secreted by cytotoxic T lymphocyte (CTL) and natural killer (NK) cells, whereas noncytolytic HCV clearance is mediated by interferon gamma (IFN-γ) secreted by CTL and NK cells. A host–HCV interaction determines whether the acute phase of an HCV infection will undergo complete resolution or progress to the development of viral persistence with a consequential progression to chronic HCV infection. Furthermore, these host–HCV interactions could pose a challenge to developing an HCV vaccine. This review will focus on the role of the innate and adaptive immunity in HCV infection, the failure of the immune response to clear an HCV infection, and the factors that promote viral persistence.