Hepatitis C virus (HCV) infection frequently persists despite substantial virus-specific cellular immune responses. To determine if immunologically driven sequence variation occurs with HCV persistence, we coordinately analyzed sequence evolution and CD8+ T cell responses to epitopes covering the entire HCV polyprotein in subjects who were followed prospectively from before infection to beyond the first year. There were no substitutions in T cell epitopes for a year after infection in a subject who cleared viremia. In contrast, in subjects with persistent viremia and detectable T cell responses, we observed substitutions in 69% of T cell epitopes, and every subject had a substitution in at least one epitope. In addition, amino acid substitutions occurred 13-fold more often within than outside T cell epitopes (P < 0.001, range 5-38). T lymphocyte recognition of 8 of 10 mutant peptides was markedly reduced compared with the initial sequence, indicating viral escape. Of 16 nonenvelope substitutions that occurred outside of known T cell epitopes, 8 represented conversion to consensus (P = 0.015). These findings reveal two distinct mechanisms of sequence evolution involved in HCV persistence: viral escape from CD8+ T cell responses and optimization of replicative capacity.