BACKGROUND: Although cirrhosis is a major risk factor for development of hepatocellular carcinoma, no definitive prospective analyses have assessed the long-term efficacy of antiviral therapy in cirrhotic patients. OBJECTIVE: To elucidate the role of antiviral therapy in the suppression of liver tumors and survival over a long-term follow-up period. DESIGN: Prospective cohort study. SETTING: 25 clinical centers. PATIENTS: 345 patients with chronic hepatitis C and cirrhosis enrolled in previous trials. INTERVENTION: 271 patients received 6 to 9 million U of interferon 3 times weekly for 26 to 88 weeks; 74 received no treatment. MEASUREMENTS: Blood tests and abdominal ultrasonography were done regularly to detect hepatocellular carcinoma. RESULTS: Hepatocellular carcinoma was detected in 119 patients during a 6.8-year follow-up: 84 (31%) in the interferon-treated group and 35 (47%) in the untreated group. Cumulative incidence of hepatocellular carcinoma among interferon-treated patients was significantly lower than in untreated patients (Cox model: age-adjusted hazard ratio, 0.65 [95% CI, 0.43 to 0.97]; P = 0.03), especially sustained virologic responders. A total of 69 patients died during follow-up: 45 (17%) in the treated group and 24 (32%) in the untreated group. Interferon-treated patients had a better chance of survival than the untreated group (Cox model: age-adjusted hazard ratio, 0.54 [CI, 0.33 to 0.89]; P = 0.02). This was especially evident in sustained virologic responders. LIMITATION: This was not a randomized, controlled study. Patients enrolled in the control group had declined to receive interferon treatment even though they were eligible for treatment. CONCLUSION: Interferon therapy for cirrhotic patients with chronic hepatitis C, especially those in whom the infection had been cured, inhibited the development of hepatocellular carcinoma and improved survival.