An estimated 71 million people worldwide are infected with hepatitis C virus (HCV). The lack of small-animal models has impeded studies of antiviral immune mechanisms. Here we show that an HCV-related hepacivirus discovered in Norway rats can establish high-titer hepatotropic infections in laboratory mice with immunological features resembling those seen in human viral hepatitis. Whereas immune-compromised mice developed persistent infection, immune-competent mice cleared the virus within 3 to 5 weeks. Acute clearance was T cell dependent and associated with liver injury. Transient depletion of CD4(+) T cells before infection resulted in chronic infection, characterized by high levels of intrahepatic regulatory T cells and expression of inhibitory molecules on intrahepatic CD8(+) T cells. Natural killer cells controlled early infection but were not essential for viral clearance. This model may provide mechanistic insights into hepatic antiviral immunity, a prerequisite for the development of HCV vaccines.