AIM: To determine which treatment modality -hepatectomy or percutaneous ablation - is more beneficial for patients with small hepatocellular carcinoma (HCC) (≤ 4 cm) in terms of long-term outcomes.METHODS: A retrospective analysis of 149 patients with HCC ≤4 cm was conducted. Eighty-five patients underwent partial hepatectomy (anatomic in 47 and nonanatomic in 38) and 64 underwent percutaneous ablation (percutaneous ethanol injection in 37, radiofrequency ablation in 21, and microwave coagulation in 6). The median follow-up period was 69 mo.RESULTS: Hepatectomy was associated with larger tumor size (P＜0.001), whereas percutaneous ablation was significantly associated with impaired hepatic functional reserve. Local recurrence was less frequent following hepatectomy (P＜ 0.0001). Survival was better following hepatectomy (median survival time:122 mo) than following percutaneous ablation (median survival time: 66 mo; P=0.0123). When tumor size was divided into ≤ 2 cm vs ＞ 2 cm, the favorable effects of hepatectomy on long-term survival was seen only in patients with tumors ＞2 cm (P= 0.0001). The Cox proportional hazards regression model revealed that hepatectomy (P= 0.006) and tumors ≤ 2 cm (P= 0.017) were independently associated with better survival.CONCLUSION: Hepatectomy provides both better local control and better long-term survival for patients with HCC ≤4 cm compared with percutaneous ablation. Of the patients with HCC ≤ 4 cm, those with tumors ＞ 2 cm are good candidates for hepatectomy, provided that the hepatic functional reserve of the patient permits resection.