BACKGROUND: Even after the surgical or medical treatment of hepatocellular carcinoma, tumors frequently develop at new foci, leading to a poor prognosis. OBJECTIVE: To assess whether combined tumor ablation and interferon therapy can reduce the occurrence of new foci of hepatocellular carcinoma, thereby improving survival rate. DESIGN: Randomized, controlled study. SETTING: University hospital. PATIENTS: 74 patients with compensated cirrhosis, three or fewer nodules of hepatocellular carcinoma, and low hepatitis C virus RNA loads (< or =2 x 10(6) copies/mL). INTERVENTION: After all patients had complete ablation of lesions by percutaneous ethanol injection therapy, 49 patients were assigned to receive 6 million U of interferon three times weekly for 48 weeks and 25 did not receive treatment. MEASUREMENTS: Abdominal ultrasonography, computed tomography, and determination of blood biochemical measures. RESULTS: Of the 49 patients treated with interferon, 21 showed a sustained biochemical response and 14 showed a sustained virologic response. The rate of first recurrence of new foci of hepatocellular carcinoma was similar in patients treated with interferon and untreated patients; however, the rates of second or third recurrence seemed to be lower in the interferon group than in the untreated group. Patients treated with interferon had a survival rate of 68% at 5 years and 53% at 7 years; untreated patients had a survival rate of 48% at 5 years and 23% at 7 years. CONCLUSION: After tumor ablation by ethanol injection, interferon therapy may enhance patient survival in selected patients with chronic hepatitis C.