A hub fairing system (12) for a stopped-rotor aircraft (10) having a fuselage (14) including a hub (16). The hub (16) is mechanically coupled to the fuselage (14) and to multiple blades (40) and is rotated by an engine (22). A retractable fairing (60, 64) covers a portion of the hub (16). An actuator (26) is coupled to the fairing (60, 64). A controller (28) is coupled to the actuator (26) and retracts the fairing (60, 64). A method of reducing drag on the aircraft includes transitioning between a rotary-wing mode and a fixed-wing mode. The fairing (60, 64) is deployed over a portion of the hub (16) upon the completion of the transition between flight modes.