Thirty-two patients with hepatocellular carcinoma (HCC) occurring in individuals with cirrhosis had a potentially curative surgical procedure. Twenty-two had segmental hepatic resections (HR), and 10 underwent orthotopic liver transplantation (OLTx). The diagnosis of hepatic malignancy was established in each case preoperatively, and each case was studied intraoperatively by means of sonography. Postoperatively each surgical specimen was examined pathologically with attention to the possibility of intrahepatic tumor spread. Twenty-three of the 32 patients had single small HCC lesion (less than 5 cm diameter) identified preoperatively. Sixteen of these underwent HR and seven underwent OLTx. Multiple additional neoplastic lesions were found in 19% of the 16 HR cases and in 14% of those undergoing OLTx when the resection specimens were examined pathologically. Vascular invasion was present in 43% of the OLTx patients and in 25% of the HR patients. Subtotal hepatic resection for small HCC occurring in cirrhosis has produced few long-term survivals. Both pre- and intraoperative sonography have been shown to underestimate the extent and distribution of these tumors. Based upon this experience that (1) vascular spread occurs often in HCC and (2) a high risk of postoperative hepatic failure can be expected after HR in cirrhotic individuals, OLTx is the most rational surgical procedure for such cases as it has the potential to cure.