IFN-α production by plasmacytoid dendritic cells (PDCs) is critical in antiviral immunity. In the present study, we evaluated the IFN-α-producing capacity of PDCs of patients with chronic hepatitis C virus (HCV) infection in treatment-naive, sustained responder, and nonresponder patients. IFN-α production was tested in PBMCs or isolated PDCs after TLR9 stimulation. Treatment-naive patients with chronic HCV infection had reduced frequency of circulating PDCs due to increased apoptosis and showed diminished IFN-α production after stimulation with TLR9 ligands. These PDC defects correlated with the presence of HCV and were in contrast with normal PDC functions of sustained responders. HCV core protein, which was detectable in the plasma of infected patients, reduced TLR9-triggered IFN-α and increased TNF-α and IL-10 production in PBMCs but not in isolated PDCs, suggesting HCV core induced PDC defects. Indeed, addition of rTNF-α and IL-10 induced apoptosis and inhibited IFN-α production in PDCs. Neutralization of TNF-α and/or IL-10 prevented HCV core-induced inhibition of IFN-α production. We identified CD14+ monocytes as the source of TNF-α and IL-10 in the HCV core-induced inhibition of PDC IFN-α production. Anti-TLR2-, not anti-TLR4-, blocking Ab prevented the HCV core-induced inhibition of IFN-α production. In conclusion, our results suggest that HCV interferes with antiviral immunity through TLR2-mediated monocyte activation triggered by the HCV core protein to induce cytokines that in turn lead to PDC apoptosis and inhibit IFN-α production. These mechanisms are likely to contribute to HCV viral escape from immune responses.