The allocation system based on the Model for End-stage Liver Disease (MELD) has led to more patients diagnosed with hepatocellular carcinoma (HCC) being transplanted. We hypothesized that more patients misdiagnosed with HCC are also being transplanted, leading to inappropriate organ allocation. Therefore, we retrospectively analyzed all liver transplants at our center from July 14, 2000, to October 22, 2002 (N = 172; 129 pre-MELD, 43 post-MELD), comparing pretransplant HCC diagnosis to explant histology. Thirty patients met the United Network for Organ Sharing (UNOS) diagnostic criteria for pretransplant HCC diagnosis. There were 25 men (median age, 52.5 yr), and 80% had hepatitis C. The proportion of patients transplanted who had an HCC diagnosis increased from 12% (15/129) pre-MELD to 35% (15/43) post-MELD implementation (P < 0.01). Three of 15 (20%) transplanted pre-MELD and 5 of 15 (33%) transplanted post-MELD lacked HCC in the explant (P = 0.10). Of the three false-positives pre-MELD, one was Status 2B already, and two received living-donor livers. Of the 5 false-positives post-MELD, three had score upgrades that led to early transplantation (13 to 29, 20 to 29, and 9 to 24) while two had MELD scores of 35 and 36 already. The percentage of organs that could have gone to patients with more advanced liver disease without HCC increased from 0% (0/129) pre-MELD to 7% (3/43) post-MELD (P < 0.01). Since the implementation of MELD, the proportion of patients transplanted who had an HCC diagnosis nearly tripled, and a small but significant proportion of organs are now going to patients misdiagnosed with HCC. More stringent HCC diagnostic criteria will be required to decrease the effect that misdiagnosis has on organ allocation.