E2/nonstructural protein 1, the putative envelope glycoprotein (gp72) of HCV, possesses an N-terminal hypervariable (E2 HV) domain from amino acids 384 to 414 of unknown significance. The high degree of amino acid sequence variation in the E2 HV domain appears to be comparable to that observed in the human immunodeficiency virus type 1 gp120 V3 domain. This observation and the observation that the HCV E2 HV domain lacks conserved secondary structure imply that, like the V3 loop of human immunodeficiency virus 1 gp120, the N-terminal E2 region may encode protective epitopes that are subject to immune selection. Antibody-epitope binding studies revealed five isolate-specific linear epitopes located in the E2 HV region. These results suggest that the E2 HV domain is a target for the human immune response and that, in addition to the three major groups of HCV, defined by nucleotide and amino acid sequence identity among HCV isolates, E2 HV-specific subgroups also exist. Analysis of the partial or complete E2 sequences of two individuals indicated that E2 HV variants can either coexist simultaneously in a single individual or that a particular variant may predominate during different episodes of disease. In the latter situation, we found one individual who developed antibodies to a subregion of the E2 HV domain (amino acids 396-407) specific to a variant that was predominant during one major episode of hepatitis but who lacked detectable antibodies to the corresponding region of a second variant that was predominant during a later episode of disease. The data suggest that the variability in the E2 HV domain may result from immune selection. The findings of this report could impact vaccine strategies and drug therapy programs designed to control and eliminate HCV.