The incidence of hepatocellular carcinoma (HCC) in Japan has kept increasing during the past few decades. Persistent infection with hepatitis C virus (HCV) is the single most frequent cause of HCC in Japan at present. Interferon is the only reliable means of eradicating HCV infection, and by inference, preventing HCC associated with it. Since interferon is not effective in all the patients with chronic hepatitis C, it needs to be used with utmost discretion. The incidence of HCC is decreased not only in the patients who respond to interferon completely, accompanied by the loss of HCV RNA from serum, but also in those who obtain normal levels of aminotransferase while HCV persists after interferon. The patients who poorly respond to interferon need to be treated by other means of suppressing necroinflammatory processes in chronic hepatitis C, which is expected to retard the development of HCC.