T ransgenic mice expressing HCV core protein develop hepatic steatosis and hepatocellular carcinoma (HCC), but the mechanism underlying this process remains unclear. Because PPARα is a central regulator of triglyceride homeostasis and mediates hepatocarcinogenesis in rodents, we determined whether PPARα contributes to HCV core protein–induced diseases. We generated PPARα-homozygous, -heterozygous, and -null mice with liver-specific transgenic expression of the core protein gene (Ppara^+/+:HCVcpTg, Ppara^+/–:HCVcpTg, and Ppara^–/–:HCVcpTg mice. Severe steatosis was unexpectedly observed only in Ppara^+/+:HCVcpTg mice, which resulted from enhanced fatty acid uptake and decreased mitochondrial β-oxidation due to breakdown of mitochondrial outer membranes. Interestingly, HCC developed in approximately 35% of 24-month-old Ppara^+/+:HCVcpTg mice, but tumors were not observed in the other genotypes. These phenomena were found to be closely associated with sustained PPARα activation. In Ppara^+/–:HCVcpTg mice, PPARα activation and the related changes did not occur despite the presence of a functional Ppara allele. However, long-term treatment of these mice with clofibrate, a PPARα activator, induced HCC with mitochondrial abnormalities and hepatic steatosis. Thus, our results indicate that persistent activation of PPARα is essential for the pathogenesis of hepatic steatosis and HCC induced by HCV infection.