Integration of 2-N-hydroxyl- and 2-N-benzoyl-1,3- diketo acid moieties into isoindole-1,3-dione led to the development of two series of hepatitis C virus NS5B polymerase inhibitors. Structural optimization to translate enzyme inhibitory activity to cellular cytotoxicity yielded compound 16c, a moderate enzyme inhibitor (IC50 = 27.3 µM) with selective toxicity to hepatitis C virus 1b replicon-containing Ava5 cells (EC50 = 18.0 µM). Binding experiments indicated that 16c (Kd = 1.25 µM) not only competed with fluorescein-labeled GTP for NS5B binding, but also displaced bound GTP from the polymerase active site.