Hepatitis C virus (HCV) nucleocapsid assembly requires dimerization of the core protein, an essential step in the formation of the virus particle. We developed a novel quantitative assay for monitoring this protein-protein interaction, with the goal of identifying inhibitors of core dimerization that might block HCV production in infected Huh-7.5 hepatoma cells. Two core-derived, 18-residue peptides were found that inhibited the dimerization of a fragment of core comprising residues 1-106 (core106) by 68 and 63%, respectively. A third, related 15-residue peptide displayed 50% inhibition, with an IC50 of 21.9 microM. This peptide was shown, by fluorescence polarization, to bind directly to core106 with a Kd of 1.9 microM and was displaced by the unlabelled peptide with an IC50 of 18.7 microM. When measured by surface plasmon resonance, the same peptide bound core169 with a Kd of 7.2 microM. When added to HCV-infected cells, each of the three peptides blocked release, but not replication, of infectious virus. When measured by real-time RT-PCR, the RNA levels were reduced by 7-fold. The 15-residue peptide had no effect on HIV propagation. Such inhibitors may constitute useful tools to investigate the role of core dimerization in the virus cycle.