This study was designed to provide a histopathological analysis focusing on fibrosis (staging) and necroinflammatory reaction (grading, hepatitis activity index: HAI) in noncancerous liver tissue, and mitotic index (MI) in cancerous liver tissue to predict prognosis in 81 patients with chronic hepatitis or cirrhosis who underwent hepatectomy for hepatocellular carcinoma (HCC). The incidence of grade 2/3 and higher HAI was higher in patients with viral hepatitis C. The incidence of grade 2/3 was associated with vascular invasion of HCC, postoperative liver dysfunction, and cancer recurrence. Higher MI (> or = 5) was significantly associated with vascular invasion, poor histological differentiation, and recurrence rate (P < 0.05). Multivariate analysis showed that higher grade was the factor strongly associated with cancer recurrence (odds ratio: 10.621, P = 0.006). Higher MI correlated with overall patient survival (P < 0.05) by univariate analysis. Grading and MI are the useful prognostic markers for predicting tumor recurrence and patient survival.