The incidence of hepatocellular carcinoma in North America is increasing. Current debate focuses on whether interferon administered to cirrhotic patients-with or without biochemical or virologic response-delays or prevents cancer of the liver. Review of the literature revealed several studies that showed improvement in or delay in progression of histologic fibrosis in patients with hepatitis C virus (HCV) infection. In patients with hepatitis B virus (HBV) infection, conversion to the nonreplicative stage may be associated with histologic improvement. However, only 11 studies (6 of HCV, 3 of HBV, and 2 of HCV and HBV) compared development of hepatocellular carcinoma in interferon-treated patients with cirrhosis and cirrhotic patients who were not treated with interferon. Although no firm statistical conclusions could be drawn, the literature suggests that interferon therapy may prevent hepatocellular carcinoma in patients with cirrhosis, particularly those infected with HCV. Interferon treatment cannot be recommended for all persons with cirrhosis and HBV or HCV infection because the current evidence is only suggestive. Long-term randomized, controlled trials may provide definitive data; however, it will be difficult, if not impossible, to conduct such trials because of the improved efficacy of combination therapy with interferon and ribavirin in patients with chronic HCV infection and the development of new therapies for patients with HBV infection.