Liver is the primary source for collagen XVIII, the precursor of angiogenesis inhibitor, endostatin. However, the role of endostatin/collagen XVIII expression during liver carcinogenesis remains elusive. Therefore, we studied its expression in five hepatoma cell lines and 105 hepatocellular carcinoma specimens. The poorly differentiated hepatoma cell lines exhibited increased endostatin/collagen XVIII levels compared with the well-differentiated ones. In hepatoma tissues, endostatin/collagen XVIII expression was detected in various types of liver cells and was significantly stronger in adjacent nontumor tissues than that in tumors (P<0.001). Endostatin/collagen XVIII expression in nontumor tissues correlated with tumor stages (P=0.014) and expression of vascular endothelial growth factor (P=0.007), but not the stages of hepatic fibrosis (P>0.05). Kaplan-Meier analysis showed that patients with higher endostatin/collagen XVIII expression had significantly shorter overall survival (P=0.011) and disease-free survival (P=0.0034). Moreover, endostatin/collagen XVIII level was an independent prognostic factor for tumor recurrence (P=0.034) by multivariate analysis. In conclusion, increased endostatin/collagen XVIII expression correlated with hepatoma progression and predicted poor prognosis for patients with hepatocellular carcinoma.