Globally, hepatocellular carcinoma (HCC) accounts for 70%‐85% of primary liver cancers and ranks as the second leading cause of male cancer death. Serum alpha‐fetoprotein (AFP), normally highly expressed in the liver only during fetal development, is reactivated in 60% of HCC tumors and associated with poor patient outcome. We hypothesize that AFP+ and AFP− tumors differ biologically. Multivariable analysis in 237 HCC cases demonstrates that AFP level predicts poor survival independent of tumor stage (P < 0.043). Using microarray‐based global microRNA (miRNA) profiling, we found that miRNA‐29 (miR‐29) family members were the most significantly (P < 0.001) down‐regulated miRNAs in AFP+ tumors. Consistent with miR‐29's role in targeting DNA methyltransferase 3A (DNMT3A), a key enzyme regulating DNA methylation, we found a significant inverse correlation (P < 0.001) between miR‐29 and DNMT3A gene expression, suggesting that they might be functionally antagonistic. Moreover, global DNA methylation profiling reveals that AFP+ and AFP− HCC tumors have distinct global DNA methylation patterns and that increased DNA methylation is associated with AFP+ HCC. Experimentally, we found that AFP expression in AFP− HCC cells induces cell proliferation, migration, and invasion. Overexpression of AFP, or conditioned media from AFP+ cells, inhibits miR‐29a expression and induces DNMT3A expression in AFP− HCC cells. AFP also inhibited transcription of the miR‐29a/b‐1 locus, and this effect is mediated through c‐MYC binding to the transcript of miR‐29a/b‐1. Furthermore, AFP expression promotes tumor growth of AFP− HCC cells in nude mice. Conclusion: Tumor biology differs considerably between AFP+ HCC and AFP− HCC; AFP is a functional antagonist of miR‐29, which may contribute to global epigenetic alterations and poor prognosis in HCC. (Hepatology 2014;60:872–883)