Hepatitis C virus NS5A is a multifunctional phosphoprotein comprised of three domains (DI, DII and DIII). DI and DII have been shown to function in genome replication, whereas DIII has a role in virus assembly. We previously demonstrated that DI in genotype 2a (JFH1) also plays a role in virus assembly, exemplified by the P145A mutant which blocked infectious virus production. Here we extend this analysis to identify two other conserved and surface exposed residues proximal to P145 (C142 and E191) that exhibited no defect in genome replication but impaired virus production. Further analysis revealed changes in the abundance of dsRNA, the size and distribution of lipid droplets (LD) and the co-localisation between NS5A and LDs in cells infected with these mutants, compared to wildtype. In parallel, to investigate the mechanism(s) underpinning this role of DI, we assessed the involvement of the interferon-induced double-stranded RNA-dependent protein kinase (PKR). In PKR-silenced cells, C142A and E191A exhibited levels of infectious virus production, LD size and co-localisation between NS5A and LD that were indistinguishable from wildtype. Co-immunoprecipitation and in vitro pulldown experiments confirmed that wildtype NS5A domain I (but not C142A or E191A) interacted with PKR. We further showed that the assembly phenotype of C142A and E191A was restored by ablation of interferon regulatory factor-1 (IRF1), a downstream effector of PKR. These data suggest a novel interaction between NS5A DI and PKR that functions to evade an antiviral pathway that blocks virus assembly through IRF1.