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Background and aims. The histologic hallmarks of chronic HCV include inflammation and fibrosis. The impact of interferon therapy on liver histology was evaluated.Material and methods. The study population consisted of 348 patients with chronic HCV who underwent a baseline liver biopsy, received either no treatment or a single course of interferon based therapy, were followed for 5 years without any treatment or additional treatment and then underwent a repeat liver biopsy. The patients were divided into 3 groups; deferred treatment (NoTx = 47), received interferon based therapy but failed to achieve SVR (NoSVR = 189) and achieved SVR (SVR = 112).Results. Patients with NoTx and NoSVR had significant increases in mean inflammation scores (from 4.3 to 6.3 and 5.4 to 6.7 respectively; p < 0.001 for both) and fibrosis scores (from 0.9 to 1.8 and 1.9 to 2.5; p < 0.001 for both). The amounts by which inflammation, fibrosis and rate of fibrosis progression increased were not significantly different between the two groups. Increases in total inflammation and the piecemeal necrosis sub-score over time were strongly associated with fibrosis progression. Patients with SVR had a significant decline in mean inflammation and fibrosis scores (from 6.7 to 2.2 and 3.3 to 1.8; p < 0.001 for both); 40% of patients resolved all fibrosis and 50% of patients resolved cirrhosis.Conclusion. Increases in inflammation are associated with fibrosis progression and in the absence of SVR interferon treatment does not appear to affect the long term natural history of this process. Patients with SVR have resolution of inflammation and fibrosis and many resolve cirrhosis.