With the increasing importance of thermal ablation (TA) in hepatocellular carcinoma (HCC) treatment, local tumor progression (LTP) has become a nonignorable recurrence type after ablation. To analyze the influence of peritumoral liver parenchyma on LTP and to explore the possible reasons for this influence. Ablated HCCs with peritumoral parenchymal biopsy and ablation margins greater than 5mm were included from two hospitals. The grade of necroinflammatory activity (G) and stage of fibrosis (S) of the parenchyma were evaluated by Scheuer staging system. Univariate/multivariate Cox model was used to analyze the possible factors influencing LTP. Peritumoral satellite focus rate, ablation energy, ablation volume after treatment, ablation volume after one-month, and volume reduction rate were collected and analyzed to explore the possible reasons for influence. Propensity score matching (PSM) was used to balance baselines across different groups. 346 HCCs (64 with LTP, 282 without LTP) were enrolled from January 2013 to June 2022, with a median follow-up of 27 months. Univariate/multivariate analysis showed fibrosis was a protective factor in LTP (OR = 0.70, 95%CI: 0.55-0.89). The low-fibrosis group exhibited higher satellite focus rate (15.6% vs. 8.4%, p = 0.048), lower ablation energy (22637 ± 9424J vs. 33352 ± 13779J, p < 0.001) and higher volume reduction rate (0.33 ± 0.06 vs. 0.25 ± 0.06, p < 0.001) than the high-fibrosis group. Therefore, we speculated that the protective effect of fibrosis was due to its blocking of tumor invasion and reduction of sublethal zones. Fibrosis of the peritumoral liver parenchyma is a stable protective factor in LTP occurrence.