The hepatitis C virus (HCV) infects nearly 3% of the World's population, causing severe liver disease in many. Standard of care therapy is currently pegylated interferon alpha and ribavirin (PegIFN/R), which is effective in less than half of those infected with the most common viral genotype. Two IL28B single nucleotide polymorphisms (SNPs), rs8099917 and rs12979860, predict response to (PegIFN/R) therapy in treatment of HCV infection. These SNPs were identified in genome wide analyses using Illumina genotyping chips. In people of European ancestry, there are 6 common (more than 1%) haplotypes for IL28B, one tagged by the rs8099917 minor allele, four tagged by rs12979860. We used massively parallel sequencing of the IL28B and IL28A gene regions generated by polymerase chain reaction (PCR) from pooled DNA samples from 100 responders and 99 non-responders to therapy, to identify common variants. Variants that had high odds ratios and were validated were then genotyped in a cohort of 905 responders and non-responders. Their predictive power was assessed, alone and in combination with HLA-C. Only SNPs in the IL28B linkage disequilibrium block predicted drug response. Eighteen SNPs were identified with evidence for association with drug response, and with a high degree of confidence in the sequence call. We found that two SNPs, rs4803221 (homozygote minor allele positive predictive value (PPV) of 77%) and rs7248668 (PPV 78%), predicted failure to respond better than the current best, rs8099917 (PPV 73%) and rs12979860 (PPV 68%) in this cross-sectional cohort. The best SNPs tagged a single common haplotype, haplotype 2. Genotypes predicted lack of response better than alleles. However, combination of IL28B haplotype 2 carrier status with the HLA-C C2C2 genotype, which has previously been reported to improve prediction in combination with IL28B, provides the highest PPV (80%). The haplotypes present alternative putative transcription factor binding and methylation sites. Massively parallel sequencing allowed identification and comparison of the best common SNPs for identifying treatment failure in therapy for HCV. SNPs tagging a single haplotype have the highest PPV, especially in combination with HLA-C. The functional basis for the association may be due to altered regulation of the gene. These approaches have utility in improving diagnostic testing and identifying causal haplotypes or SNPs.