Background/Aims : Postoperative intrahepatic recurrence of human hepatocellular carcinoma is high. Recently, the relationship between proliferating cell activity in the cirrhotic liver and occurrence or recurrence of hepatocellular carcinoma has been reported. Methods : One hundred two resected cases of small hepatocellular carcinoma of <3 cm in diameter without venous invasion or intrahepatic metastasis were examined to ascertain the factors affecting postoperative intrahepatic recurrence. Results : Cumulative intrahepatic recurrence rates at 1, 3, and 5 years after surgery were 12.0%, 57.2%, and 67.6%, respectively. The log-rank test indicated that serum albumin levels of <3.7 g/dL, alanine aminotransferase levels of more than 54 IU/L, active inflammation in the nontumorous portion, and high proliferating cell nuclear antigen labeling index in the nontumorous portion (>23.2%) were significant risk factors for recurrence. Tumor factors, including tumor size, histological grade, or α-fetoprotein level, were not significant risk factors. Cox's proportional hazard model identified that serum albumin level and alanine aminotransferase level were independently associated with intrahepatic recurrence after hepatectomy. Conclusions : This study suggests that the principal cause linked to either a recurrence or a second new growth of hepatocellular carcinoma in the remnant liver after hepatectomy was the state of the underlying liver parenchyma as well as other tumor factors per se.