The diversity and extent of sequence variations between hepatitis C virus (HCV) isolates from Pakistan were studied and the probable effects of these variations were assessed on secondary viral structures. Sequencing and phylogenetic analysis was performed on 33 samples, of which 25 were typed as genotype 3 by RFLP (restriction fragment length polymorphism) and 8 remained unresolved. Rooted neighbour-joining (NJ) tree revealed that 28 isolates were HCV type 3a and 5 isolates were typed as 3b. The majority of unresolved samples clustered in a different branch of genotype 3, supported by a bootstrap value of 71%. Another, cluster, cluster I, was found to have a bootstrap value of 81%. Genetic distance values showed significant diversity of isolates in these two clusters compared to the reference sequences. Pair-wise comparison showed the presence of additional restriction sites of HaeIII and RsaI in unresolved isolates. In conclusion, unique sequence variability was observed in the 5′-UTR of HCV type 3 isolates from Pakistan. One of the reasons for this sequence variability is the presence of mutations, which are additional restriction sites in the 5′-UTR. These mutations were also responsible for failure of conventional RFLP to type some of the HCV isolates.