An HCV model with saturation incidence and cellular immunity is constructed and analyzed. The model takes account of both intrahepatic and extrahepatic tissues and the effect of antiviral drugs especially the interferon. The basic reproduction number R01 and CTL immune reproduction number R02 are calculated, respectively. The existence of three equilibria, namely infection-free, immune response-free, infection-immune coexistence equilibrium is analyzed with a novel method. Stability analysis is also given with corresponding reproduction number, and the results show that when R01<1, there are no virus and immune response existed in the end; when R02<1<R01, the virus survives, but immune response gradually disappears; when R02>1, the system will be globally stable with both virus and immune response existing. Numerical analysis is also given which is consistent with the theoretical analysis.