Purpose: Thyroid dysfunction has been reported in 1–3% of patients with chronic hepatitis C treated with interferon therapy. We prospectively studied this problem in our patients with an attempt to determine the role played by autoimmunity in thyroid dysfunction. Methods: 39 patients (18 males and 21 females) aged 18–55 years with chronic hepatitis C were treated with pegylated interferon alpha in combination with ribavirin. Baseline thyroid stimulating hormone (TSH) and free thyroxine (free T4) levels were obtained on all patients prior to therapy. At baseline, every patient had an autoimmune panel sent which consists of antithyroid microsomal antibody, antithyroglobulin antibody and thyroid stimulating immunoglobulins and was euthyroid prior to beginning interferon therapy. Beginning at week twelve all patients had TSH and free T4 levels monitored on a monthly basis for the duration of the therapy. If there was any variation from the normal range a new set of thyroid autoantibodies were redrawn to evaluate for development of autoimmune thyroid dysfunction. Results: 9 out of 39 patients (8 females and 1 male) or 23% showed changes in their thyroid functions between week 12 and the end of treatment. 7 of the 9 patients were genotype 3a.Of these group 8 patients became clinically hypothyroid and 1 patient developed transient hyperthyroidism requiring treatment and soon thereafter became hypothyroid requiring synthroid. From these 9 patients 2 developed new antithyroid microsomal antibodies and anti thyroglobulin antibodies while 1 patient showed increase in levels of preexisting microsomal and anti thyroglobulin antibody titers. 3 of the 9 patients or 33% had thyroid autoantibodies as the mechanism of hypothyroidism. Only 2 of the 9 or 22% developed new thyroid autoantibodies. Conclusions: In our cohort of mostly Pakistani genotype 3a patients there was a much higher incidence of hypothyroidism (23%) on PEG interferon and ribavirin treatment than 1–3%. This much higher rate of thyroid dysfunction could be due to a small sample size or it maybe due to a greater susceptibility of Pakistani women or genotype 3a patients to this complication. The large difference favors the latter. As the numbers show there is a 8 to 1 female predominance for this phenomenon. Finally only a minority of the cases are explained by thyroid autoantibodies (33%).This suggests that there are other unexplained mechanisms for the hypothyroidism perhaps including a direct effect of PEG interferon on the thyroid gland.