Tegobuvir (TGV) is a novel non-nucleoside inhibitor (NNI) of HCV RNA replication with demonstrated antiviral activity in patients with genotype 1 chronic HCV infection. The mechanism of action of TGV has not been clearly defined despite the identification of resistance mutations mapping to the NS5B polymerase region. TGV does not inhibit NS5B enzymatic activity in biochemical assays in vitro, suggesting a more complex antiviral mechanism with cellular components. Here, we demonstrate that TGV exerts anti-HCV activity utilizing a unique chemical activation and subsequent direct interaction with the NS5B protein. Treatment of HCV subgenomic replicon cells with TGV results in a modified form of NS5B with a distinctly altered mobility on a SDS-PAGE gel. Further analysis reveals that the aberrantly migrating NS5B species contains the inhibitor molecule. Formation of this complex does not require the presence of any other HCV proteins. The intensity of the aberrantly migrating NS5B species is strongly dependent on cellular glutathione levels as well as CYP 1A activity. Furthermore analysis of NS5B protein purified from a heterologous expression system treated with TGV by mass spectrometry suggests that TGV undergoes a CYP- mediated intracellular activation step and the resulting metabolite, after forming a glutathione conjugate, directly and specifically interacts with NS5B. Taken together, these data demonstrate that upon metabolic activation TGV is a specific, covalent inhibitor of the HCV NS5B polymerase and is mechanistically distinct from other classes of the non-nucleoside inhibitors (NNI) of the viral polymerase.