The purpose of this study was to determine trends in disease incidence and recent patterns of hepatitis C virus (HCV) transmission in Canada, using the Enhanced Hepatitis Strain Surveillance System (EHSSS). Demographic, clinical, and potential risk factor information on newly acquired HCV infection, from 1998 to 2004, was collected using standardized questionnaires. During this time period, the reported incidence of newly acquired HCV infection declined by 36.4% from 3.3 cases per 100,000 in 1998, to 2.1 cases per 100,000 in 2004. The disease incidence peaked at 15 to 39 y of age, confirming injecting drug use as the most frequently reported route of transmission. The proportion of cases attributed to health care-acquired HCV infection decreased over this time period. Although the incidence of newly acquired HCV infection in the EHSSS was found to be declining, hepatitis C remains an important public health threat to Canadians. Prevention efforts for HCV should focus on injection drug use, especially for people aged 15 to 39 y.