Patients are stratified according to HCV genotype and CD4 count and viral load, then randomized to either Arm A (IFN plus ribavirin) or Arm B (PEG-IFN plus ribavirin). Patients receive up to 48 weeks of treatment. Virologic response is assessed at Week 24 and a decision to continue or discontinue treatment is made. If a virologic response is shown at Week 24, the patient continues treatment for an additional 24 weeks. If no virologic response is observed, then the histologic response is assessed by a liver biopsy. If biopsy shows a histologic response is present, treatment is continued for 24 weeks. If biopsy shows no histologic response, treatment is discontinued. [AS PER AMENDMENT 07/20/01: Patients with virologic response who discontinue after Week 24 will have liver biopsy at time of discontinuation. Patients with no virologic response continuing study treatment after having a liver biopsy within 2 weeks of Week 24, who also demonstrate histologic response and decide to discontinue after Week 24, are strongly encouraged to have a 2nd liver biopsy at the end of treatment. Patients with no virologic response who discontinue after Week 24 will not have liver biopsy at time of discontinuation.] Physical examinations are done regularly and blood samples collected for routine laboratory tests, confidential genetic testing, and to measure HCV and HIV-1 plasma viral loads. Women able to become pregnant have regular pregnancy tests. All patients are followed for an additional 24 weeks after treatment discontinuation.