Pegylated interferon α (PEG IFN‐α) improves sustained virological response rates in chronic hepatitis C, but neither its role in acute hepatitis C nor the biologic basis for its action has been defined. This prospective study assessed the efficacy of PEG IFN‐α treatment in acute hepatitis C in relation to the kinetics of hepatitis C virus (HCV)‐specific CD4⁺ T cell responses during therapy and follow‐up. Forty subjects with proven acute hepatitis C who received either PEG IFN‐α plus ribavirin (n = 20) or PEG IFN‐α monotherapy (n = 20) for 24 weeks in addition to 14 untreated subjects with acute hepatitis C were prospectively followed. Serum HCV RNA, HCV‐specific CD4⁺ T cell responses, and cytokine production were measured before and during therapy and at follow‐up and correlated to the outcome. The sustained virological response rate was 85% with PEG IFN‐α/ribavirin combination and 80% with PEG IFN‐α monotherapy. Five untreated subjects had spontaneous recovery. The frequency, magnitude, and breadth of HCV‐specific CD4⁺ T helper 1 responses were significantly higher in treated subjects compared with untreated subjects with self‐limited disease or subjects with chronic evolution. The CD4⁺ T cell responses were maintained in subjects with sustained virological responses and self‐limited disease but fluctuated in those who developed chronic infection. In conclusion, PEG IFN‐α therapy in acute hepatitis induces high rates of sustained virological response and prevents choronicity, probably through efficient early stimulation of multispecific HCV‐specific CD4⁺ T helper 1 responses. (HEPATOLOGY 2004;39:1721–1731.)