Risk factors for the development of hepatocellular carcinoma (HCC) were investigated in 397 patients who underwent non-shunt operation for esophageal varices due to underlying cirrhosis or pre-cirrhosis between September 1979 and May 1995. Ninety-five of these patients developed HCC. The clinical characteristics of patients at the time of surgery for varices, stages (F0-F4) of the progression of fibrosis, and grades (A0-A3) of necroinflammatory activity in liver biopsy tissue obtained at surgery in 170 patients based on the New Inuyama Classification (Int. Hepatol. Commun. 6 (1996) 112), were analyzed to investigate their relationship with the development of HCC. In addition, the levels of AST and ALT were followed every 3 months after surgery in 116 patients, and were divided into 2 groups at 80 IU/ml to compare the level of risk for the development of HCC. In liver biopsy tissue, group F4 (n=68/152, 45%) showed a significantly higher (P=0.0224) rate of appearance of HCC than group F3 (n=3/18, 17%). Group F4 also tended to show a higher cumulative HCC appearance rate of 55% compared with 37% for group F3 at 10 years after surgery (P=0.097). In regard to activity, the appearance rate of HCC in group A2+A3 (n=52/112, 51%) was significantly higher (P=0.0008) than that of HCC in group A1 (n=14/58, 25%). The cumulative appearance rate (60%) of HCC in group A2+A3 was significantly higher than that (31%) in group A1 at 10 years after surgery (P=0.0003). The appearance rate of HCC was significantly higher in the group (n=33/44, 75%) with a mean AST level >/=80 IU/ml than in the group (n=41/72, 57%) with a mean AST level <80 IU/ml (P=0.0496). A multivariate analysis of the risk factors for the development of HCC showed that necroinflammatory activity was a risk factor. These results suggested that the histopathologic classification (the New Inuyama Classification) of liver biopsy tissue from patients who underwent non-shunt operation for esophageal varices due to underlying cirrhosis or pre-cirrhosis is useful for predicting the development of HCC, to which the grades of necroinflammatory activity in particular are more closely related.