Partial hepatic resection has been the mainstay of curative treatment for hepatocellular carcinoma (HCC) in cirrhotic patients with preserved liver function. Liver transplantation for HCC was initially developed as a treatment option for patients with unresectable tumors associated with Child B or C cirrhosis. However, in recent years, some authors have advocated liver transplantation even for resectable early HCC associated with Child A cirrhosis. Whether transplantation or liver resection is the optimal initial treatment for early HCC in compensated cirrhosis depends on the survival results and also the availability of liver grafts. Recent studies comparing liver resection and transplantation for early HCC in Child A cirrhotic patients demonstrated similar long-term survival. While liver transplantation is associated with a lower tumor recurrence rate, this benefit is counteracted by long-term complications such as immunosuppression related infections and neoplasms. Patients put on transplantation waiting list run a significant risk of tumor progression and dropout, while liver resection is immediately applicable to all. A premature liver transplantation may expose patients to the side effects of immunosuppression earlier than necessary. With the current shortage of liver grafts, advocating primary liver transplantation for patients with early HCC associated with compensated cirrhosis will increase waiting time of transplantation and further increases the chance of dropout. Resection first and salvage transplantation for recurrent tumors or liver failure has been shown to be a feasible strategy in the majority of patients, and this appears to be the optimal strategy with the best use of organs.