We clarified the indication of partial hepatectomy in hepatocellular carcinoma (HCC) patients with liver cirrhosis classified as Child-Pugh class B. Univariate analysis revealed that adverse prognostic factors were (1) the presence of ascites, (2) elevated total bilirubin (1.5 mg/dl or higher), (3) reduced choline esterase (160 IU/ or lower), (4) elevated alpha-fetoprotein (AFP) (400 ng/ml or higher), (5) microscopic vascular invasion, and (6) non-curative hepatectomy. Microvascular invasion was excluded in the multivariate analysis because this factor could not be predicted before hepatectomy. Multivariate analysis revealed that independent adverse prognostic factors were (1) elevated total bilirubin (1.5 mg/dl or higher), (2) presence of ascites, (3) elevated AFP (400 ng/ml or higher), and (4) non-curative hepatectomy. The overall 5-year survival rate of patients with none of or only one of the four adverse prognostic factors was 45.8%. The overall 5-year survival rate of patients with two or more adverse prognostic factors was only 7.0%. Partial hepatectomy is the first choice of treatment for patients with none of or only one of the four adverse prognostic factors, whereas orthotopic liver transplantation or other conservative treatment should be considered for patients with two or more adverse prognostic factors.