Percutaneous ethanol injection (PEI) was applied to 162 lesions in 133 patients with hepatocellular carcinomas (HCC) 3 cm or less in diameter (small HCC) between Aug. 1983 and Apr. 1992. Histological findings in resected specimen for which PEI had previously been performed before surgery showed that PEI could completely necrotize an HCC of 32 mm in diameter. The antitumoral effect by PEI could correctly be evaluated by enhanced CT. The 1-, 3-, 5- and 7-year survival rates after PEI calculated by the Kaplan-Meier method were 95.9%, 60.5%, 36.9% and 21.7%, respectively. The survival rate of post-PEI patients with I or II grade in clinical stage was better than that of those with III. Recurrence occurred in hepatic areas different from the original lesion in 27.8% in one year and 63.6% in three years after PEI, rates quite similar to those of recurrence after surgical resection for HCCs of 3 cm or less in diameter. For such recurrence, PEI alone was then repeated in half of the 76 patients. Complications caused by PEI were not serious and did not necessitate intensive care. Because of its anti-tumor therapeutic effect and minimal damage to the liver, PEI might be considered a viable alternative to surgery for most patients with small HCC.