The nonstructural protein NS3 of the hepatitis C virus (HCV) harbors a serine protease domain that is responsible for most of the processing events of the nonstructural region of the polyprotein. Its inhibition is presently regarded as a promising strategy for coping with the disease caused by HCV. In this work, we show that the NS3 protease undergoes inhibition by the N-terminal cleavage products of substrate peptides corresponding to the NS4A-NS4B, NS4B-NS5A, and NS5A-NS5B cleavage sites, whereas no inhibition is observed with a cleavage product of the intramolecular NS3-NS4A junction. The K-i values of the hexamer inhibitory products [K-i(NS4A) = 0.6 mu M, K-i(NS5A) = 1.4 mu M, and K-i(NS4B) 180 mu M] are lower than the K-m values of the respective substrate peptides [K-m(NS4A-NS4B) 10 mu M, K-m(NS5A-NS5B) 3.8 mu M, and K-m(NS4B-NS5A) > 1000 mu M]. Mutagenesis experiments have identified Lys136 as an important determinant for product binding. The phenomenon of product inhibition can be exploited to optimize peptide inhibitors of NS3 protease activity that may be useful in drug development.