A clonal population of B cells expressing a V_H1‐69‐encoded idiotype accumulates in hepatitis C virus (HCV) associated mixed cryoglobulinemia (MC). These cells are phenotypically heterogeneous, resembling either typical marginal zone (MZ) B cells (IgM⁺IgD⁺CD27⁺CD21⁺) or the exhausted CD21^low B cells that accumulate in HIV infection or in common variable immunodeficiency. We show that both the MZ‐like and the CD21^low V_H1‐69⁺ B cells of MC patients are functionally exhausted, since they fail to respond to TLR and BCR ligands. The proliferative defect of V_H1‐69⁺ B cells can be overcome by co‐stimulation of TLR9 and BCR in the presence of interleukin(IL)‐2 and IL‐10. The MZ‐like V_H1‐69⁺ B cells do not express the inhibitory receptors distinctive of CD21^low B cells, but display constitutive activation of extracellular signal regulated kinase (ERK) and attenuated BCR/ERK signaling. These cells also express abundant transcripts of Stra13 (DEC1, Bhlhb2, Sharp2, Clast5), a basic helix‐loop‐helix transcription factor that acts as a powerful negative regulator of B‐cell proliferation and homeostasis. Our findings suggest that MZ B cells activated by HCV undergo functional exhaustion associated with BCR signaling defects and overexpression of a key antiproliferative gene, and may subsequently become terminally spent CD21^low B cells. Premature exhaustion may serve to prevent the outgrowth of chronically stimulated MZ B cells.