OBJECTIVES Achieving sustained virologic response (SVR) could prevent further transmission of hepatitis C virus (HCV) and reduce chronic hepatitis C (CHC) incidence; we developed a compartment model to describe the dynamics of HCV transmission in the United States. METHODS This population model was expressed by partial differential equations across compartments based on: injection-drug use, CHC infection, diagnosis, genotypes, treatment/re-treatment, SVR and disease progression. Model inputs were based on published sources. Model was calibrated from 2002-2006 and matched closely with CDC reports and other published literature. The calibrated model was then applied to assess the CHC burdens from 2007-2040 under the current pegylated-interferon/ribavirin (P/R) treatment strategy. A scenario from a hypothetical new CHC regimen (NEW) was also assessed. This included: NEW available in 2011 (70% SVR) for genotype-1, treatment-naïve patients; P/R treatment-failure patients (TFs) re-treated by NEW with 50% SVR; NEW not used to treat genotype-2/3 patients; P/R durations consistent with current treatment guidelines by genotypes and costs $28,000/48-week; diagnosis and treatment rates remain unchanged with NEW. All costs were converted into 2007 dollars using 3% discount rate. RESULTS Under P/R, US CHC prevalence at 2040 is projected to be around 1.7 million. Overall CHC direct medical cost is about $6 billion a year under P/R, only 13% of which is treatment-related; the remaining 87% comes from managing the comorbidities and long-term consequences of advanced liver disease (ALD) among undiagnosed patients, diagnosed-but-never-treated patients, and TFs. Compared to P/R, NEW is projected to cure 351,448 more patients, prevent 23,444 more CHC incidences, avert 103,953 more ALD incidence, and prevent 39,929 more deaths from 2007-2040. CHC prevalence at 2040 under NEW is projected to be 335,000 fewer patients. CONCLUSIONS: A new CHC regimen may have a higher public health impact than P/R. Costs unrelated to current CHC treatment with P/R are the major burden of hepatitis C.