The type 1 interferons (IFN) α and β are able to stimulate the expression of hundreds of interferon-stimulated genes (ISGs), some of which are known to have direct antiviral and immunomodulatory activity. The range of ISGs responsible for the direct control of HCV is not known, although a number of candidates are emerging. We have recently identified the interferon-induced transmembrane protein (IFITM) family; IFITM1, IFITM2 and IFITM3 to be able to significantly decrease HCV replication in vitro. Further analysis identified that the IFITM proteins do not act at the level of HCV RNA replication (HCV replicon) or HCV translation, indicating inhibitory role(s) at a different stage in the HCV lifecycle. We have demonstrated the three IFITM proteins to have separate and distinct localization patterns within hepatocytes. Cellular analysis identified IFITM1 to interact with CD81 on the surface of hepatocytes via FRET analysis. CD81 is an essential entry receptor for HCV suggesting that IFITM1 may interfere with HCV entry into the hepatocyte. IFITM2 and IFITM3 localised predominantly to the cytoplasm and specifically to the late (Rab7) and early (Rab5a) endosomes, respectively. Recently, Rab5a and Rab7 positive endosomes have been demonstrated to be associated with the establishment of the HCV replication complex, as well as HCV egress. Further investigations are currently underway to ascertain the exact role of IFITM2 and IFITM3 in the HCV lifecycle. Investigations into the molecular mechanism(s) whereby the IFITM proteins act could reveal novel therapeutic targets for treatment of HCV infection.