Hepatocarcinogenesis is a multistep process, but systematic analysis using a genetic or molecular approach to accurately delineate the different stages of hepatocellular carcinoma (HCC) development is scarce. In this study, we used genome-wide allelotyping to systematically evaluate the allelic alterations in the multisteps of hepatitis B virus-associated hepatocarcinogenesis. The overall fractional allelic loss (FAL) indices of cirrhosis, dysplastic nodules (DN), and HCC were significantly different, with a clear stepwise increase (P < 0.001). Loss of heterozygosity (LOH) was uncommon in cirrhotic livers (n = 24; mean FAL index +/- SD, 0.09 +/- 0.09; median, 0.07). In contrast, LOH was common in our 74 HCC nodules, which were predominantly hepatitis B virus-associated (mean FAL index +/- SD, 0.40 +/- 0.23; median, 0.38). The 18 DNs had FAL index (mean +/- SD, 0.27 +/- 0.19; median, 0.20) in between that of cirrhosis and HCC. Importantly, high-grade DNs had FAL index significantly higher than that of low-grade DNs (P = 0.031) and close to that of HCC, indicating that high-grade DNs were genetically closer to HCC. However, there was no significant difference in FAL indices between primary HCCs and their corresponding intrahepatic metastases, but this absence of major allelic losses in this transformation to a metastatic phenotype does not exclude small-scale chromosomal losses or gene deletions. To conclude, hepatitis B virus-associated hepatocarcinogenesis is a multistep process accompanied by stepwise increase in allelic losses from cirrhosis and low- and high-grade DN to HCC. Such allelic losses contribute to promote tumor development and progression.