Hepatitis C virus (HCV) infection is the major cause of chronic liver disease, leading to cirrhosis and hepatocellular carcinoma, and affects more than 200 million people worldwide. Although combination therapy of interferon-alpha and ribavirin is reasonably successful in treating majority of genotypes, its efficacy against the predominant genotype (genotype 1) is moderate at best, with only about 40% of the patients showing sustained virological response. Herein, the SAR leading to the discovery of a series of ketoamide derived P(1)-P(3) macrocyclic inhibitors that are more potent than the first generation clinical candidate, boceprevir (1, Sch 503034), is discussed. The optimization of these macrocyclic inhibitors identified a P(3) imide capped analogue 52 that was 20 times more potent than 1 and demonstrated good oral pharmacokinetics in rats. X-ray structure of 52 bound to NS3 protease and biological data are also discussed.