To understand increasing rates of hepatitis C virus (HCV) infection in Tennessee, we conducted testing, risk factor analysis and a nested case–control study among persons who use drugs. During June–October 2016, HCV testing with risk factor assessment was conducted in sexually transmitted disease clinics, family planning clinics and an addiction treatment facility in eastern Tennessee; data were analysed by using multivariable logistic regression. A nested case–control study was conducted to assess drug-using risks and behaviours among persons who reported intranasal or injection drug use (IDU). Of 4753 persons tested, 397 (8.4%) were HCV-antibody positive. HCV infection was significantly associated with a history of both intranasal and IDU (adjusted odds ratio (aOR) 35.4, 95% confidence interval (CI) 24.1–51.9), IDU alone (aOR 52.7, CI 25.3–109.9), intranasal drug use alone (aOR 2.6, CI 1.8–3.9) and incarceration (aOR 2.7, CI 2.0–3.8). By 4 October 2016, 574 persons with a reported history of drug use; 63 (11%) were interviewed further. Of 31 persons who used both intranasal and injection drugs, 26 (84%) reported previous intranasal drug use, occurring 1–18 years (median 5.5 years) before their first IDU. Our findings provide evidence that reported IDU, intranasal drug use and incarceration are independent indicators of risk for past or present HCV infection in the study population.