Molecular modeling and inhibitory potencies of tetrapeptide protease inhibitors of HCV NS3 proposed phenylglycine as a new promising P2 residue. The results suggest that phenylglycine might be capable of interacting with the NS3 (protease-helicase/NTPase) in ways not possible for the common P2 proline-based inhibitors. Thus, a series of tripeptides, both linear and macrocyclic, based on p-hydroxy-phenylglycine in the P2 position were prepared and their inhibitory effect determined. When the p-hydroxy group was replaced by methoxy, isoquinolin-, or quinolinyloxy functions, inhibitors with improved potencies were obtained. The P2 phenylglycine-based inhibitors were further optimized by C-terminal extension to acyl sulfonamides and by P1-P3 cyclization, which gave products with inhibition constants in the nanomolar range ( approximately 75nM).