To identify the genes associated with dedifferentiation of hepatocellular carcinoma (HCC), gene expression profiles of HCCs of well-and moderately differentiated grades were compared by means of oligonucleotide arrays. One tumor showed a nodule-in-nodule appearance (NIN), which is occasionally observed in the course of progression of HCC from well to less differentiated grade, when an inner, moderately differentiated tumor (MD) develops sequentially from the outer, well-differentiated tumor (WD). Seventy-six genes were identified to be up-regulated more than 3-fold and 33 genes were down-regulated in the inner nodule in NIN. By statistical analysis of the profiles from 10 individual additional liver tumors, 5 WDs and 5 MDs, we were able to identify 12 genes, LAMA3, PPIB, ADAR, PSMD4, NDUFS8, D9SVA, CCT3, GBAP, ARD1, RDBP, CSRP2, and TLE1, with significantly elevated expression, and 4 genes, CP, IL7R, CD48, and PLGL, with decreased expression in MD. These selected genes were further validated using another 12 tumors, 5 WDs and 7 MDs, with semi-quantitative RT-PCR. We also applied neighborhood analysis to list the genes with high predictability values as most closely correlated with WD-MD distinction. Seven genes, ADAR, PSMD4, D9SVA, CCT3, GBAP, RDBP, and CSRP2, whose expression was elevated and one gene, IL7R, whose expression was decreased, were included among the top 50 predictor genes. These genes are likely to be associated with dedifferentiation of HCC and their identification may help to elucidate the mechanism of liver cancer progression.