Background. The role of orthotopic liver transplantation in the treatment of patients with cirrhosis and hepatocellular carcinoma is controversial, and determining which patients are likely to have a good outcome after liver transplantation is difficult. Methods. We studied 48 patients with cirrhosis who had small, unresectable hepatocellular carcinomas and who underwent liver transplantation. In 94 percent of the patients, the cirrhosis was related to infection with hepatitis B virus, hepatitis C virus, or both. The presence of tumor was confirmed by biopsy or serum alpha-fetoprotein assay. The criteria for eligibility for transplantation were the presence of a tumor 5 cm or less in diameter in patients with single hepatocellular carcinomas and no more than three tumor nodules, each 3 cm or less in diameter, in patients with multiple tumors. Twenty-eight patients with sufficient hepatic function underwent treatment for the tumor, mainly chemoembolization, before transplantation. After liver transplantation, the patients were followed prospectively for a median of 26 months (range, 9 to 54). No anticancer treatment was given after transplantation. Results. The overall mortality rate was 17 percent. After four years, the actuarial survival rate was 75 percent and the rate of recurrence-free survival was 83 percent. Hepatocellular carcinoma recurred in four patients (8 percent). The overall and recurrence-free survival rates at four years among the 35 patients (73 percent of the total) who met the predetermined criteria for the selection of small hepatocellular carcinomas at pathological review of the explanted liver were 85 percent and 92 percent, respectively, whereas the rates in the 13 patients (27 percent) whose tumors exceeded these limits were 50 percent and 59 percent, respectively (P=0.01 for overall survival; P=0.002 for recurrence-free survival). In this group of 48 patients with early-stage tumors, tumor-node-metastasis status, the number of tumors, the serum alpha- fetoprotein concentration, treatment received before transplantation, and 10 other variables were not significantly correlated with survival. Conclusions. Liver transplantation is an effective treatment for small, unresectable hepatocellular carcinomas in patients with cirrhosis.