This study will determine the efficacy of PEG-Intron (SCH 54031) in participants with chronic Hepatitis C virus (HCV) infection who have not been previously treated with interferon. Participants are randomized to receive one of three doses of PEG-Intron (0.5, 1.0, and 1.5 mg/kg) or Interferon Alfa-2B for 48 weeks. The primary objective of this study is to evaluate the efficacy of PEG-Intron (compared to Interferon Alfa-2B) with respect to response based on loss of detectable HCV ribonucleic acid (HCV-RNA) and normalization of alanine transaminase (ALT) level after 24 weeks of therapy and at 24 weeks of follow-up.

Inclusion Criteria:

• Be serum positive for hepatitis C virus.
• Have liver biopsy within 1 year prior to entry, with a pathology report confirming a histological diagnosis consistent with chronic hepatitis.
• Have one abnormal historic ALT at least 6 months prior to screening, with elevated ALT at entry.
• Have compensated liver disease, testing negative for HIV and serum hepatitis B surface antigen (HBsAg) at entry.
• If male or female of childbearing potential, be practicing adequate contraception during treatment.

Exclusion Criteria:

• Be female who is currently pregnant or nursing.
• Have prior treatment with any interferon.
• Have suspected hypersensitivity to alpha interferon.
• Have participated in any other clinical trial within 30 days of entry
• Have received treatment with any investigational drug within 30 days of entry.
• Have received prior treatment for hepatitis with any other antiviral or immunomodulatory drug within the previous 2 years.
• Have any other cause for the liver disease other than chronic hepatitis C including but not limited to: co-infection with hepatitis B virus; Hemochromatosis; alpha-1 antitrypsin deficiency; Wilson's disease; autoimmune hepatitis; alcoholic liver disease; obesity-induced liver disease; and drug-related liver disease.
• Have hemophilia or any other condition that would prevent the participant from having a liver biopsy, including anticoagulant therapy.
• Have hemoglobinopathies (e.g., Thalassemia)
• Have evidence of advanced liver disease such as history or presence of ascites, bleeding varices, spontaneous encephalopathy.
• Have received organ transplants.
• Have a preexisting psychiatric condition, especially severe depression, or a history of severe psychiatric disorder, such as major psychoses, suicidal ideation and/or attempt.
• Have central nervous system trauma or active seizure disorders requiring medication.
• Have significant cardiovascular dysfunction within the past 6 months (e.g., angina, congestive heart failure, recent myocardial infarction, severe hypertension or significant arrhythmia).
• Have poorly controlled diabetes mellitus.
• Have chronic pulmonary disease (e.g., chronic obstructive pulmonary disease).
• Have immunologically mediated disease (e.g., inflammatory bowel disease [Crohn's disease, ulcerative colitis], rheumatoid arthritis, idiopathic thrombocytopenia purpura, systemic lupus erythematosus, autoimmune hemolytic anemia, scleroderma, severe psoriasis, clinical cryoglobulinemia with vasculitis).
• Have any medical condition requiring, or likely to require during the course of the study, chronic systemic administration of steroids.
• Have history of substance abuse, such as alcohol, intravenous drugs and inhaled drugs.
• Have clinically significant retinal abnormalities.
• Be unable to abstain from the consumption of alcohol.
• Have any other condition which in the opinion of the investigator would make the patient unsuitable for enrollment, or could interfere with the patient participating in and completing the protocol.

The investigator agrees to provide the Sponsor thirty (30) days prior to submission for publication or presentation, copies of abstracts or manuscripts for publication which report project results. The Sponsor shall have editorial rights with respect to Publications, abstracts, slides, and manuscripts and the right to review and comment on the data analysis and presentation with regard to (a) proprietary information and, (b) the accuracy of the information contained in the Publication.