Insulin resistance (IR), a key factor in the development of steatosis, is a common finding in patients with hepatitis C virus (HCV) infection. In patients with genotype 1 infection, IR has been noted in up to 80% of patients in some studies. In patients with non-alcoholic fatty liver disease (NAFLD) who have evidence of nonalcoholic steatohepatitis (NASH), the role of IR leading to decreased fatty acid oxidation, increased production of pro-inflammatory cytokines and increased oxidative stress had been proposed as an important mechanism leading to steatosis and subsequent liver cell injury. Recently, an association between steatosis and hepatic fibrosis has been emphasized in HCV infection, similar to that described in patients with NAFLD. While IR and hepatic steatosis are common findings in patients with HCV infection, the latter with prevalence rates of 40% to 70%, and different HCV genotypes confers distinct risks for steatosis; a greater degree of steatosis is seen in patients with genotype 3 infection compared to others. Similar to that seen in patients with NAFLD, patients infected with genotype 1 HCV show a relationship between body mass index (BMI) and risk for steatosis. However, in up to 30% of patients with HCV infection and hepatic steatosis, no other risk factors for steatosis can be identified. The investigators' preliminary data will show that even in HCV infected individuals with low BMI and no steatosis, there is IR and the risk for steatosis is increased when directly compared to NAFLD patients. Recent data also suggest that the presence of hepatic steatosis is an independent predictor of decreased response to antiviral therapy even when controlling for genotype. This is especially important in patients with type 1 infection.

The investigators hypothesize that in patients with HCV genotype 1 infection, treatment with antiviral therapy will have a partial effect on reducing insulin resistance (IR) and steatosis and this is augmented by the addition of an insulin sensitizing thiazolidinedione (TZD) agent such as pioglitazone to the treatment regimen. The investigators also hypothesize that the rate of sustained virological response (SVR) will be higher in the antiviral regimen + pioglitazone treated group compared to patients receiving antiviral therapy alone.

The investigators' specific aims are the following:

1. To assess the improvement in insulin sensitivity in patients with treatment naïve genotype 1 chronic hepatitis C treated with standard antiviral therapy + pioglitazone or placebo
2. To assess the improvement in hepatic steatosis in patients with treatment naïve genotype 1 chronic hepatitis C after treatment with standard antiviral therapy + pioglitazone or placebo
3. To assess the rates of sustained virological response (SVR) among patients with treatment naïve genotype 1 chronic hepatitis C treated with standard antiviral therapy + pioglitazone compared to standard antiviral therapy + placebo