Purpose To investigate the impact of hematoma expansion (HE) on short-term functional outcome of patients with thalamic and basal ganglia intracerebral hemorrhage. Methods Data of 420 patients with deep intracerebral hemorrhage (ICH) that received a baseline CT scan within 6 hours from symptom onset and a follow-up CT scan within 72 hours were retrospectively analyzed. The poor functional outcome was defined as modified Rankin score (mRS) > 3 at 30 days. Receiver operating characteristic (ROC) curves for relative and absolute growth of HE were generated and compared. Multivariable logistic regression models were used to analyze the impact of HE on the functional outcome in basal ganglia and thalamic hemorrhages. The predictive values for different thresholds of HE were calculated, and correlation coefficient matrices were used to explore the correlation between the covariables. Results Basal ganglia ICH showed a higher possibility of absolute hematoma growth than thalamic ICH. The area under the curve (AUC) for absolute and relative growth of thalamic hemorrhage was lower than that of basal ganglia hemorrhage (AUC 0.71 and 0.67, respectively) in discriminating short-term poor outcome with an AUC of 0.59 and 0.60, respectively. Each threshold of HE independently predicted poor outcome in basal ganglia ICH (P < 0.001), with HE > 3 ml and > 6 ml showing higher positive predictive values and accuracy compared to HE > 33%. In contrast, thalamic ICH had a smaller baseline volume (BV, 9.55 ± 6.85 ml) and was more likely to initially involve the posterior limb of internal capsule (PLIC) (85/153, 57.82%), and the risk of HE was lower without PLIC involvement (4.76%, P = 0.009). Therefore, in multivariate analysis, the effect of thalamic HE on poor prognosis was largely replaced by BV and the involvement of PLIC, and the adjusted odds ratios (ORs) of HE was not significant (P > 0.05). Conclusion Though HE is a high-risk factor for short-term poor functional outcome, it is not an independent risk factor in thalamic ICH, and absolute growth is more predictive of poor outcome than relative growth for basal ganglia ICH.