Interleukin (IL)-35, a newly identified member of the IL-12 cytokine family, has been reported to suppress inflammation and induce immunotolerance. However, little is known regarding the role of IL-35 during chronic hepatitis C virus (HCV) infection. Herein, we measured the serum IL-35 concentration of 73 patients with hepatitis C and 22 healthy individuals, as well as further investigated the modulatory function of IL-35 on CD4+CD25+CD127dim/− regulatory T cells (Tregs) and on hepatocytes infected with HCV in cell culture (HCVcc). IL-35 expression was significantly increased in patients with chronic hepatitis C and was positively correlated with the levels of HCV RNA. Inhibition of viral replication led to decreases in the serum levels of IL-35. IL-35 stimulation not only elevated the percentage of Tregs but also robustly inhibited cellular proliferation and up-regulated the production of anti-inflammatory cytokines (e.g., IL-10 and IL-35) in a HCV-specific and non-specific manner, which indicates enhancement of the suppressive function of Tregs. Although IL-35 did not exert anti-HCV activity in HCVcc-infected Huh7.5 cells, it reduced inflammatory cytokine secretion from Huh7.5 cells. This was probably via inhibition of the STAT1 and STAT3 signaling pathways, which could suppress subsequent liver damage due to chronic hepatitis C. The current data suggested that IL-35 contributes to persistent HCV infection by inhibiting antiviral immune activity. Moreover, IL-35 might also protect against HCV-induced liver injury by down-regulating the expression of proinflammatory cytokines. Thus, the immunosuppressive properties of IL-35 might play contradictory roles in maintaining viral persistence and reducing the inflammatory responses in chronic HCV infection.