Patients with chronic hepatitis C virus (HCV) infection have a significantly increased prevalence of type 2 DM compared to controls or HBV-infected patients, independent of the presence of cirrhosis. Moreover, antecedent HCV infection markedly increases the risk of developing DM in susceptible subjects. Even non-diabetic HCV patients have insulin resistance and specific defects in the insulin-signalling pathway. Activation of the tumour necrosis factor (TNF)-alpha system has a pivotal role in the inflammatory process of chronic hepatitis C, and TNF-alpha levels correlate with the degree of inflammation. TNF-alpha is known to cause insulin resistance, with similar defects in the insulin signalling pathway to those described in HCV infection. A model of mice transgenic for the HCV core protein demonstrated insulin resistance, glucose intolerance, and elevated intrahepatic TNF-alpha mRNA; all of which were ameliorated by anti-TNF-alpha antibodies. In addition, diabetic HCV patients have significantly higher levels of soluble TNF-alpha receptors, compared to non-diabetic HCV patients and controls. TNF-alpha may be the link between HCV infection and diabetes, suggesting an additional mechanism of diabetes with important implications for prognosis and therapy.