To evaluate the therapeutic efficacy of transcatheter arterial chemoembolization (TACE) combined with percutaneous ethanol injection therapy (PEIT) for advanced hepatocellular carcinoma, we studied the effectiveness of TACE therapy combined with PEIT (50 cases) and TACE alone (50 cases). In both groups, patients had multiple lesions, or a single lesion with a diameter exceeding 2 cm or with vascular invasion (stages II, III, and IV in the tumor staging classification of the Liver Cancer Study Group of Japan). The clinical features in the two groups were comparable. The cumulative survival rates with TACE-PEIT were 95.0% for 1 year, 72.5% for 2 years, and 50.0% for 3 years, whereas the rates with TACE alone were 92.5% for 1 year, 57.5% for 2 years, and 20.0% for 3 years. The survival rate in the TACE-PEIT group was significantly higher than that in the TACE alone group. Moreover, the survival rate of patients with stage II or III disease in the TACE-PEIT group was significantly better than that in the TACE alone group, and the survival rate of patients with Child's classification B or C in the TACE-PEIT group was significantly higher than that in the TACE alone group. Multivariate analysis using Cox's proportional hazard regression model showed that the most significant prognostic factors in the TACE-PEIT group were tumor embolus in the portal vein and the number of tumors. These results suggest the effectiveness of combining TACE and PEIT for the treatment of advanced hepatocellular carcinoma.