A combination of nitazoxanide (NTZ), peginterferon (PegIFN), and ribavirin (RBV) may result in higher sustained virologic response (SVR) rates in hepatitis C virus (HCV) monoinfected patients. This study evaluated the effect of NTZ on interferon-stimulated gene (ISG) expression in vitro and in vivo among HIV/HCV genotype-1 (GT-1) treatment-naive patients. The ability of NTZ to enhance host response to interferon (IFN) signaling using the HCV cell culture system was initially evaluated. Second, ISG expression in 53 patients with treatment outcomes [21 SVR and 32 nonresponders (NR)] in the ACTG A5269 trial, a phase-II study (4-week lead in of NTZ 500 mg daily followed by 48 weeks of NTZ, PegIFN, and weight-based RBV), was assessed. The relative expression of 48 ISGs in peripheral blood mononuclear cells (PBMCs) was measured at baseline, week 4, and week 8 of treatment in a blinded manner. In vitro NTZ produced a direct and additive antiviral effect with IFN-alfa, with pretreatment of NTZ resulting in maximal HCV suppression. NTZ augmented IFN-mediated ISG induction in PBMCs from relapsers and SVRs (p < 0.05), but not NR. In ACTG A5269, baseline expression of most ISGs was similar between NR and SVR. NTZ minimally induced 17 genes in NR and 13 genes in SVR after 4 weeks of therapy. However, after initiation of PegIFN and RBV, ISG induction was predominantly observed in the SVR group and not NR group. NTZ treatment facilitates IFN-induced suppression of HCV replication. Inability to achieve SVR with IFN-based therapy in this clinical trial is associated with diminished ISG response to therapy that is refractory to NTZ.