Recurrent or metastatic disease is frequently encountered among patients who have had resection of their primary hepatocellular carcinoma. A retrospective study on 117 patients (104 men, 13 women; mean age +/- standard deviation: 53.8 +/- 12.4 yr) who had hepatectomy for large hepatocellular carcinoma (diameter greater than or equal to 5 cm) was conducted to identify an at-risk population for tumor recurrence. Disease-free survival was correlated with 22 clinical (n = 5), serological (n = 2), gross pathological (n = 3) and histological (n = 12) features of the resected specimens using Cox's multivariate regression analysis. Recurrent hepatocellular carcinoma was detected in 74 patients within a median follow-up period of 13.7 mo. Although 17 patients had extrahepatic disease alone, recurrence was confined to the hepatic remnant in 40 patients. Disease-free survival rates at 1, 3 and 5 yr were 40%, 19% and 12%, respectively. Two of the five histological parameters isolated, negative resection margin (p less than 0.01) and encapsulation (p less than 0.006), were identified as favorable independent prognostic predictors. When patients with positive margins were excluded from the analysis, repeated calculation showed that encapsulation was the only important determinant. From this analysis, detailed histological study of the resected tumor is seen to be the only satisfactory means for assessing long-term prognosis. An aggressive approach is warranted among patients with encapsulated tumors. Even with a clear resection margin, adjuvant treatment should be considered for those patients who have unencapsulated lesions.