Hepatitis C virus (HCV) envelope glycoprotein co-evolution was studied in 14 genotype 1-infected and treatment-naive subjects, including 7 with mild and 7 with severe liver disease. Cassettes encoding the envelope 1 gene (E1) and hypervariable region (HVR1) of the envelope 2 gene were isolated at 38 different time points over 81 follow-up years. There were no significant differences in age, gender, alcohol use, or viral load between the mild and severe disease groups. Virus from subjects with severe disease had significantly slower evolution in HVR1, and significant divergent evolution of E1 quasispecies, characterized by a preponderance of synonymous mutations, compared to virus from subjects with mild disease. Phylogenetic comparisons indicated higher similarity between amino acid sequences of the E1 and HVR1 regions with mild disease versus severe disease (r=0.44 versus r=0.17, respectively; P=0.01). In summary, HCV envelope quasispecies co-evolution differs during mild versus severe disease.