Chronic hepatitis C virus (HCV) infection is characterized by diminished numbers and function of HCV-reactive T cells and impaired responses to immunization. Because host response to viral infection likely involves TLR signaling, we examined whether chronic HCV infection impairs APC response to TLR ligand and contributes to the origin of dysfunctional T cells. Freshly purified myeloid dendritic cells (MDC) and plasmacytoid DC (PDC) obtained from subjects with chronic HCV infection and healthy controls were exposed to TLR ligands (poly(I:C), R-848, or CpG), in the presence or absence of cytokine (TNF-alpha or IL-3), and examined for indices of maturation and for their ability to activate allogeneic naive CD4 T cells to proliferate and secrete IFN-gamma. TLR ligand was observed to enhance both MDC and PDC activation of naive CD4 T cells. Although there was increased CD83 and CD86 expression on MDC from HCV-infected persons, the ability of MDC to activate naive CD4 T cells in the presence or absence of poly(I:C) or TNF-alpha did not differ between HCV-infected and healthy control subjects. In contrast, PDC from HCV-infected persons had reduced activation marker (HLA-DR) and cytokine (IFN-alpha) expression upon R-848 stimulation, and these were associated with impaired activation of naive CD4 T cells. These data indicate that an impaired PDC responsiveness to TLR ligation may play an important role in the fundamental and unexplained failure to induce new T cell responses to HCV Ags and to other new Ags as a consequence of HCV infection.