The morphologic characteristics and biologic behavior of small liver cancers with hepatic and biliary differentiation, and their histogenesis, remain unclear. In this study, 35 cases of hepatocellular carcinoma (HCC) smaller than 3 cm in diameter with biliary differentiation were divided into 3 groups, group 1 [cytokeratin (CK) 19-negative/mucin-negative], group 2 (CK 19-positive/mucin-negative), and group 3 (CK 19-positive/mucin-positive). Sixty-one HCCs without biliary differentiation were used as controls. We compared the histologic features of these tumors and the postoperative outcomes. Three morphologic features of HCCs with biliary differentiation were respectively observed in 40% (14/35), 60% (21/35), and 42.9% (15/35) as follows: (1) cancer cells with intermediate morphology, (2) prominent inflammatory cell infiltrate, (3) desmoplastic stroma; neural cell adhesion molecule and c-kit expression were noted in 25.7%(9/35) and 8.6%(3/35), respectively. Extrahepatic tumor recurrence after surgery occurred in 0% (0/16) of group 1, 33.3% (3/9) of group 2, 40.0% (4/10) of group 3, and 8.2% (5/61) of the ordinary HCCs. The tumor-related survival of group 3 patients was worse than that of patients with ordinary HCCs, but there were no differences between the survival of group 1, or group 2 patients and those with ordinary HCCs. Our results suggest that the biliary differentiation does occur even in small HCC, and a mucin-producing cancer cells indicates aggressive tumor behavior. The combination of intermediate cancer cells, inflammatory cell infiltrate, and desmoplastic stroma is likely to be related to the biliary differentiation of HCC.