The purpose of this study is to assess the safety, tolerability and pharmacokinetics of 4 weeks therapy with FK788 in subjects with chronic hepatitis C virus (HCV) infection. Also, to assess the effect of FK788 on serum ALT concentration and hepatitis C viral level during therapy and for four weeks following therapy.

This is a multi-center, randomized, investigator and subject blinded, placebo-controlled eight week study, including a four week treatment period and a four week follow-up period. Three cohorts of HCV positive subjects will be studied in a sequential manner.

The following criteria is a brief summary of Criterion required for trial participation.

Inclusion Criteria

• Has chronic hepatitis C virus infection and has previously received at least three months of treatment with any approved therapy and failed to respond, relapsed or did not tolerate therapy
• Has positive HCV RNA by RT-PCR
• Has abnormal ALT levels (at least 2 X ULN)
• Has liver biopsy within past 2 years consistent with chronic hepatitis, no evidence of non-alcoholic steatohepatitis or cirrhosis, and at least mild inflammation
• Has normal liver function indicated by: PT =< 2 sec. prolonged compared to the ULN, Albumin >= 3.5 g/dL, Total bilirubin =< 1.5 mg/dL
• ANA titer =< 1:160

Exclusion Criteria

• Has positive skin test for tuberculosis
• Has ALT value >= 300 IU/L
• Has abnormal hematological parameters indicated by: ANC < 1500/mm3 and Platelets < 100,000/mm3
• Has creatinine > 1.5 X ULN
• AFP > 50 ng/mL and evidence of hepatocellular carcinoma on ultrasound
• Is a carrier of the hepatitis B surface antigen (HBsAg), positive for HIV-1 and/or HIV-2 antibodies