Abstract Diverse immune cells in the tumor microenvironment form a complex ecosystem, but our knowledge of their heterogeneity and dynamics within hepatocellular carcinoma (HCC) remains poorly understood. We assess the plasticity and phenotypes of immune cells within HCC microenvironment at single-cell level. We performed single-cell RNA sequencing on 41,698 immune cells from 7 pairs of HCC tumors and nontumor liver tissues. We combined bioinformatic analyses, flow cytometry and multiplex immunohistochemistry to assess the heterogeneity of different immune subsets in functional characteristics, transcriptional regulation, phenotypic switching, and interactions. We identified 29 immune subsets of myeloid cells, NK cells, and lymphocytes with unique transcriptomic profiles in HCC. A highly complex immunological network was shaped by immune subsets with diverse characteristics that can transit among different states and mutually engage through intercellular communication. Notably, we identified a subset of M2 macrophage with high expression of CCL18 and transcription factor CREM that was enriched in advanced HCC patients, and potentially participated in tumor progression. We also detected a new subset of activated CD8+ T cells highly expressing XCL1 that correlated with better patient survival, and possibly enhanced anti-tumor response. Meanwhile, distinct transcriptomic signatures, cytotoxic phenotypes and evolution trajectory of effector CD8+ T cells from early-stage to advanced HCC were also identified. Our study presents a comprehensive insight for dissecting the immune microenvironment in HCC and highlights novel macrophage and T cell subsets that could be further exploited in future immunotherapy. Citation Format: Guohe Song, Yang Shi, Youpei Lin, Juan Zhang, Shuaixi Yang, Qiang Gao. Global immune characterization of hepatocellular carcinoma identifies macrophage and T cell subsets related to disease progression [abstract]. In: Proceedings of the AACR Virtual Special Conference on Tumor Heterogeneity: From Single Cells to Clinical Impact; 2020 Sep 17-18. Philadelphia (PA): AACR; Cancer Res 2020;80(21 Suppl):Abstract nr PO-055.