It is critical to understand the molecular mechanisms of hepatocarcinogenesis in order to prevent or treat hepatocellular carcinoma (HCC). The development of HCC is commonly associated with hepatocyte death and compensatory proliferation. However, the role of Caspase-3, a key apoptotic executor, in hepatocarcinogenesis is unknown. In this study, we used Caspase-3-deficient mice to examine the role of Caspase-3 in hepatocarcinogenesis in a chemical (diethylnitrosamine, DEN)-induced HCC model. We found that Caspase-3 deficiency significantly increased DEN-induced HCC. Unexpectedly, Caspase-3 deficiency increased apoptosis induced by DEN and the subsequent compensatory proliferation. Intriguingly, we discovered that Caspase-3 deficiency increased the activation of p38 with and without DEN treatment. Moreover, we demonstrated that TNFα and IL1α stimulated increased activation of p38 in Caspase-3 KO hepatocytes compared with wild-type hepatocytes. Finally, we found that inhibition of p38 by SB202190 abrogated enhanced hepatocyte death, compensatory proliferation and HCC induced by DEN in Caspase-3-deficient mice. Overall, our data suggest that Caspase-3 inhibits chemical-induced hepatocarcinogenesis by suppressing p38 activation and hepatocyte death.