Patients with hepatitis C virus (HCV) infection have a higher prevalence of psychiatric illness compared with the general US population, and the prevalence of HCV infection in patients with severe mental illness ranges between 8% and 19%, which is four to nine times that of the general US population (1.8%). Given the association between HCV infection and psychiatric illness, gastroenterologists are on the front line of identifying comorbid psychiatric and substance use disorders and conducting a psychosocial pretreatment risk-benefit assessment for HCV infection. The use of interferon-alpha (IFN)-based therapies in combination with ribavirin (RBV) to eradicate HCV has been associated with frequent neuropsychiatric adverse effects (eg, affective, anxiety, cognitive, and psychotic symptoms) that compromise the management of both HCV patients with and those without a preexisting history of psychiatric illness. Consequently, gastroenterologists have been reluctant to engage patients with HCV and comorbid psychiatric illness in antiviral treatment due to concerns about exacerbating or precipitating neuropsychiatric symptoms. Despite the clinical challenge that HCV treatment of patients with comorbid HCV and psychiatric illness presents, recent research indicates that HCV treatments can be safely administered to patients with psychiatric illness provided that there is a comprehensive pretreatment assessment, a risk-benefit analysis, and ongoing follow-up of neuropsychiatric symptoms during antiviral therapy. The process of pretreatment assessment involves screening patients for psychiatric and substance use disorders, educating patients about the treatment process, and addressing available psychosocial support. Most psychotropic medications (antidepressants, mood stabilizers, antipsychotics, and neuroleptics) are thought to be safe to use in the management of patients with HCV and psychiatric illness and for the management of IFN- and RBV-induced neuropsychiatric adverse effects. Nonetheless, the prophylactic use of psychotropic medications to prevent IFN- and RBV-induced neuropsychiatric adverse effects remains a controversial topic. The use of IFN and RBV in patients with HCV and severe mental illness can be done safely with expert psychiatric follow-up. In this review, we discuss the process of pretreatment assessment of patients with HCV and psychiatric illness and specifically address IFN- and RBV-induced depression in patients receiving HCV treatment.