Hepatitis C virus (HCV) has the ability to persist in the majority of infected people. Strong, multispecific and sustained T-cell response is correlated with viral clearance. The mechanisms of chronicity by HCV are unclear. HCV could restrain the immune system and establish chronic infection by modulating dendritic cell (DC) function, T-cell function or both. DC dysfunction has been postulated to be either due to direct HCV infection or by the presence of HCV proteins. In this report, for the first time, we have examined whether soluble HCV proteins can impair DC function or directly inhibit T-cell responses in the cells obtained from healthy uninfected people. Our studies revealed that different HCV proteins used distinct mechanisms to down-regulate DC functions. Individual HCV proteins, Core, NS3, NS4, NS5 as well as fused Polyprotein (Core-NS3-NS4) were found to impair functions of both immature DCs and mature DCs by regulating the expression of co-stimulatory and antigen presentation molecules, strikingly reducing IL-12 secretion, inducing the expression of FasL to mediate apoptosis, interfering with allo-stimulatory capacity, inhibiting toll-like receptor signaling and inhibiting nuclear translocation of NFkappaB in DCs. Interestingly, HCV proteins did not directly inhibit T-cell proliferation. Our findings clearly demonstrate that HCV proteins impair T-cell responses indirectly by inhibiting DCs that could result in a sub-optimal cellular immune response allowing for persistent HCV infections. These studies delineate important mechanisms by which initial DC dysfunction can establish contributing to chronicity. Our data are in agreement with earlier observations that DCs are impaired in HCV infected people.