To elucidate the etiologic role of chronic hepatitis B virus (HBV) infection and the role of liver cirrhosis in hepatocellular carcinoma (HCC), pathologic and virologic features of the disease were studied in 51 children with HCC; these accounted for 4.3% of 1195 pathologically proven HCC patients examined in the last three decades. Males predominated (M/F = 3.3:1), and the mean age was 11 years (range: 4-15 years). Hepatitis B surface antigen (HBsAg) was detected in the liver and/or serum of 100% of 42 children by immunocytochemical and/or radioimmunoassay, in the serum of 90% of 10 siblings, and more importantly in 94.1% of 17 mothers, suggesting that infection from familial HBsAg carriers, particularly carrier mothers, may contribute to the high incidence. Liver cirrhosis was frequent (74%), especially in the unresectable cases (87%); in the 20 children under 9 years of age, 95% were cirrhotic, a significantly higher level than the 58% of the 26 older children, P less than 0.005. All but one had advanced HCC, with 1-year survival in only 10.5%. The advanced HCC coupled with young age suggests that HCC can develop rapidly. The low positive rates of serum hepatitis B e antigen (HBeAg, 18%) and liver hepatitis B core antigen (11%) coupled with high frequency of liver cirrhosis indicate that an early HBeAg seroconversion to anti-HBe, in association with severe liver injury, may play an important role in the rapid development of HCC in children.