Cyclosporine is an immunosuppressive agent widely used in the management of liver transplant recipients. Cyclosporine has been shown to have antiviral activities against HIV, herpes simplex, and vaccinia viruses. The aim of this study was to determine the effect of Cyclosporine in viral clearance in the liver transplant recipients during therapy with combination of interferon and ribavirin, and to determine the anti-viral potential of Cyclosporine in vitro. Immunosuppression consisted of either Cyclosporine or Tacrolimus-based therapy. Both groups received therapy with interferon and ribavirin for 48 weeks when evidence of progressive histologic disease was determined. We found that subjects on Cyclosporine-based immunosuppression (n = 56) had a higher sustained virological response of 46% compared to 27% in the patients on Tacrolimus-based therapy (n = 59, P = 0.03). In vitro studies were performed to evaluate the antiviral effect of Cyclosporine in the replicon system. These studies showed that Cyclosporine inhibits hepatitis C viral replication in a dose-dependent manner. Combination of Cyclosporine with interferon showed additive effect, and its function is independent of interferon signaling pathways. In conclusion, Cyclosporine may offer an advantage to Tacrolimus in those patients undergoing interferon-based therapy and should be studied in a prospective randomized trial.