Summary Background It remains unclear whether initial compact lipiodol uptake after transarterial chemoembolisation (TACE) is associated with improved survival in patients with hepatocellular carcinoma (HCC). Aim To reveal the clinical relevance of compact lipiodolisation after TACE. Methods We studied 490 patients with unresectable HCC who had first been treated with TACE. Compact lipiodolisation was defined as the absence of an arterial enhancing lesion, reflecting complete lipiodol uptake, as assessed by dynamic computed tomography (CT) 1 month after treatment. The rate of initial compact lipiodolisation was analysed according to multiplicity and size of tumour, and survival of patients who achieved compact lipiodolisation was compared to that of patients who did not. Results Of the 490 patients, 409 (83.5%) were in Child–Pugh class A and 81 (16.5%) in class B. The rate of initial compact lipiodolisation in single HCCs was higher than that in multinodular HCCs (33.7% vs. 14.6%, P < 0.001). Among single HCCs, the rate of compact lipiodolisation in tumours ≤5, 5–10 and >10 cm was 46.6%, 13.6%, and 0% respectively. The 1‐, 3‐ and 5‐year survival rates of patients with compact uptake were 92.7%, 70.7% and 52.4% compared to 60.8%, 28.0% and 16.9% in patients with noncompact lipiodolisation. Multivariate analysis revealed that Child–Pugh class, alpha‐fetoprotein level, tumour node metastasis stage, portal vein thrombosis and initial compact lipiodolisation were independent predictors of survival. Conclusions Initial compact lipiodol uptake after transarterial chemoembolisation is associated with improved survival in patients with unresectable hepatocellular carcinoma. Accordingly, initial complete lipiodolisation should be considered a relevant therapeutic target.