Hepatitis C virus (HCV) is a leading cause of liver cancer and cirrhosis, and Egypt has possibly the highest HCV prevalence worldwide. In this article we use a newly developed Bayesian inference framework to estimate the transmission dynamics of HCV in Egypt from sampled viral gene sequences, and to predict the public health impact of the virus. Our results indicate that the effective number of HCV infections in Egypt underwent rapid exponential growth between 1930 and 1955. The timing and speed of this spread provides quantitative genetic evidence that the Egyptian HCV epidemic was initiated and propagated by extensive antischistosomiasis injection campaigns. Although our results show that HCV transmission has since decreased, we conclude that HCV is likely to remain prevalent in Egypt for several decades. Our combined population genetic and epidemiological analysis provides detailed estimates of historical changes in Egyptian HCV prevalence. Because our results are consistent with a demographic scenario specified a priori, they also provide an objective test of inference methods based on the coalescent process.