This comparative study was conducted to clarify the efficacy of percutaneous ethanol injection (PEI) and surgical resection in the treatment of small hepatocellular carcinomas (HCC). Thirty-nine patients treated by PEI and 58 who underwent hepatic resection for small HCC (smaller than 3 cm and 3 or less in number) during the same period were enrolled. The surgery group included more patients with large and multiple bilobar nodules than the PEI group. The histological differentiation of the treated tumors became worse in the surgery patients than in those treated by PEI. On the other hand, the PEI group included more patients with a poor hepatic reserve, according to Child-Pugh grading, the ICG test, and the serum total bilirubin value. The 1-, 3-, and 5-year overall survival rates were almost identical between the 2 cohorts (100%, 82.1%, and 59.0%, respectively, in the PEI group; 96.6%, 84.4%, and 61.5%, respectively, in the surgery group) (P =.96). During the follow-up period, 33 of 39 (85%) and 41 of 58 (71%) patients developed tumor recurrence after PEI and surgery, respectively. Cumulative 1-, 3-, and 5-year tumor-free survival rates in the PEI group were 63.4%, 30.3%, and 9.7 %, whereas those in the surgery group were 75.5%, 44.7%, and 25.7%, respectively (P =.10). Our overall findings show that local therapy can achieve an actual 5-year survival rate of around 60% for patients with small HCC with the proper selection of treatment. A prospective randomized comparative trial is required to settle this longstanding issue.