BACKGROUND Intrahepatic disease recurrence is observed frequently after locoregional therapies for patients with hepatocellular carcinoma (HCC). However, the indication for locoregional therapy is still unclear. To clarify the indication for locoregional therapy for small HCC tumors, the authors measured the distance of microsatellites from the main tumor and analyzed the relation between this distance and clinicopathologic factors. METHODS The authors retrospectively analyzed 100 patients with small HCC tumors (≤ 5 cm in dimension) treated by curative hepatectomy. A microsatellite was defined as invasion into the portal vein or intrahepatic metastasis, and the distance from the main tumor to the most distant microsatellite was determined under light microscopy. The current study investigated the relation between microsatellite distance (0 mm if none present, ≤ 5 mm, and > 5 mm) and clinicopathologic factors, as well as overall and disease‐free survival rates after hepatectomy. RESULTS Of the 100 patients, 46 had microsatellites with a mean distance of 9.9 mm (median, 5.0 mm). Of the clinicopathologic factors investigated, tumor grade and preoperative α‐fetoprotein level significantly correlated with the presence of a microsatellite. Tumor size and distance to the microsatellite were significantly correlated. All but 1 tumor associated with a microsatellite distance > 5 mm was a high‐grade tumor > 25 mm in greatest dimension. The overall survival rate of patients with a microsatellite distance of > 5 mm was lower than that of patients with a microsatellite distance < 5 mm. CONCLUSIONS Locoregional therapy, including limited resection and ablation therapies, was appropriate for patients with low‐grade HCC tumors or with tumors < 25 mm in diameter. Cancer 2005. © 2004 American Cancer Society. The distance of microsatellites from small (diameter ≤ 5 cm) HCC tumors correlated significantly with tumor size. Twenty‐one of 22 patients with a microsatellite distance > 5 mm had a tumor ≥ 25 mm in greatest dimension, and all 21 tumors were high‐grade (moderately to poorly differentiated) HCCs. Locoregional therapies were appropriate for patients with low‐grade HCC tumors or with HCC tumors < 25 mm in dimension.