In patients chronically infected with hepatitis C virus (HCV) strains of genotype 1, rapid and dramatic antiviral activity has been observed with telaprevir (VX-950), a highly selective and potent inhibitor of the HCV NS3-4A serine protease. HCV variants with substitutions in the NS3 protease domain were observed in some patients during telaprevir dosing. In this study, purified protease domain proteins and reconstituted HCV subgenomic replicons were used for phenotypic characterization of many of these substitutions. V36A/M or T54A substitutions conferred less than eightfold resistance to telaprevir. Variants with double substitutions at Val36 plus Thr54 had approximately 20-fold resistance to telaprevir, and variants with double substitutions at Val36 plus Arg155 or Ala156 had >40-fold resistance to telaprevir. An X-ray structure of the HCV strain H protease domain containing the V36M substitution in a cocomplex with an NS4A cofactor peptide was solved at a 2.4-A resolution. Except for the side chain of Met36, the V36M variant structure is identical to that of the wild-type apoenzyme. The in vitro replication capacity of most variants was significantly lower than that of the wild-type replicon in cells, which is consistent with the impaired in vivo fitness estimated from telaprevir-dosed patients. Finally, the sensitivity of these replicon variants to alpha interferon or ribavirin remained unchanged compared to that of the wild-type.