BACKGROUND/AIMS: This study was designed to compare the survival rates of patients with hepatocellular carcinoma (HCC) who were treated either with surgical resection (SR) or transarterial chemoembolization (TACE). METHODS: From 1993 through 1994, 183 patients with HCC in UICC T1-3N0M0 and liver function of Child-Pugh class A were enrolled. The patients were divided into two groups (SR group and TACE group) according to the treatment modality. Stratification was performed according to the tumor stage (UICC or CLIP) and the degree of lipiodol retention. Survival rates of SR group and TACE group were compared. RESULTS: When the both groups were stratified with UICC T stage, median survival of SR group and TACE group was 54 and 31 months, respectively, in UICC T1 HCC (p=0.0998), 65 and 37 months in T2 (p=0.0154), and 14 and 27 months in T3 (p=0.5432). In the stratification with CLIP stage, median survival of SR group was significantly longer in CLIP 0 or 1 HCC patients than that of TACE group. In the patients showing compact lipiodol uptake, median survival of SR group and TACE group in UICC T1 and T2 was 65 and 50 months (p=0.1529), and 65 and 48 months in CLIP 0 (p=0.1012), respectively. CONCLUSIONS: When compact lipiodol uptake is observed, repeated TACE may be as effective as surgery in patients with HCC of UICC T1, 2 or CLIP 0, as well as the patients with more advanced HCC.