This study investigated the prognostic impact of muscle volume loss (MVL) and muscle function decline in patients undergoing resection for hepatocellular carcinoma (HCC). This study enrolled 171 naïve HCC patients treated with resection from 2007 to 2015, after excluding those lacking spirometry or computed tomography findings, who had received non-curative treatments, or with restrictive or obstructive lung disorders. The median peak expiratory flow rate (%PEF) was set as the cut-off value for muscle function decline, and MVL was diagnosed using a previously reported value. Clinical backgrounds and prognosis were retrospectively evaluated. Overall survival rate was lower in the MVL (n=35) as compared with the non-MVL (n=136) group (1/3/5-year overall survival rate=88.2%/81.6%/55.6% vs 91.0%/81.5%/74.8%, respectively; P=0.0083), while there were no differences regarding hepatic function or tumor burden between the groups. Child-Pugh class B (hazard ratio [HR] 3.510, 95% confidence interval [CI]: 1.558-7.926, P=0.0025), beyond Milan criteria (HR 1.866, 95%CI: 1.024-3.403, P=0.042), and presence of MVL (HR 1.896, 95%CI: 1.052-3.416, P = 0.033) were significant prognostic factors. The decreased %PEF group (n=84) showed a higher rate of postoperative delirium than the others (n=87) (27.4% vs 11.5%, P=0.0088). The cut-off values for %PEF and age for postoperative delirium were 63.3% (area under receiver operating characteristic [AUROC] 0.697) and 73years old (AUROC 0.734), respectively. Delirium was observed in 50.0% (14/28) of patients with both factors, 23.8% (15/63) of those with 1 factor, and 5.0% (4/80) of those without either factor. Muscle volume loss is an independent prognostic factor in HCC patients treated with surgical resection, while advanced age and decreased muscle function might indicate high risk for postoperative delirium.