Interferon alpha (IFN-α) is the approved standard of care for chronic hepatitis C and B. Unfortunately, it has neuropsychiatric side-effects that have a major impact upon the quality of life and the drug adherence. The mechanism of IFN-α-induced behavioral changes is complex, involving interactions between the immune system, the endocrine system, the monoaminergic systems and the opioid receptors. Recent studies support the neurodegeneration hypothesis as a possible mechanism of IFN-α-induced depressive behavior. Although a meta-analysis showed that antidepressant pretreatment effectively reduces the incidence and severity of depressive symptoms, irrespective of pre-existing psychiatric disorders, it is not approved for prophylactic use. The "on demand" treatment strategy is justified as the majority of patients have only mild depressive symptoms. Patients with risk factors for depression undergoing IFN-α therapy need to be regularly screened and followed-up by a psychiatric specialist. Further studies should be conducted to show which therapy is the most appropriate to reduce the neuropsychiatric symptoms that are related to the use of IFN-α and to investigate the clinical significance of IFN-α-induced neurodegeneration.