Hepatitis C virus (HCV) Core protein is implicated in viral pathogenesis by the modulation of hepatocyte gene expression and function. To determine the effect of Core protein on the cell-cycle control of hepatocytes, a HepG2 cell line containing a Flag-tagged Core under the control of an inducible promoter was generated. Initial Core protein expression included the presence of unprocessed (191 aa) and processed (173 aa) forms of the Core proteins with the processed form becoming dominant later. Expression of the 191 aa form of Core protein corresponded to an increase in the expression of the p21, a decrease in cdk2-dependent kinase activity, and a decrease in the percentage of cells in S-phase along with an accumulation of cells in the G₀/G₁ phase of the cell cycle. As the processed form accumulated, the p21 levels started to decline, suggesting that Core protein regulates p21 expression in a biphasic manner. These findings implicate Core protein in potentially modulating hepatocyte cell cycle differentially in the early stages of infection through biphasic regulation of p21 cdk kinase inhibitor.