This study investigated the inhibitory effect of the extract of fungi of Huaier (EFH) on the growth of hepatocellular carcinoma (HCC) cells. Hep-G2 cells, a human HCC cell line, were cultured in DMEM containing 10% fetal bovine serum and treated with EFH of different concentrations (1, 2, 4, 8 mg/mL) for 24, 48 and 72 h respectively. The apoptosis rate of the cells was flow cytometrically measured. Thirty-six tumor-bearing New Zealand rabbits were randomly divided into 3 groups: group A (control group), in which the rabbits were infused with 0.2 mL/kg normal saline via the hepatic artery; group B (transhepatic artery chemoembolization [TACE] group), in which the rabbits were given lipiodol at 0.2 mL/kg plus MMC at 0.5 mg/kg via the hepatic artery; group C (TACE+EFH group), in which EFH (500 mg/kg) were orally administered after TACE. Two weeks after TACE, the rabbits were sacrificed and the implanted tumors were sampled. The tumor volume and the necrosis rate were determined. The tumor tissues were immunohistochemically detected for the expressions of factor VIII, VEGF, P53, Bax and Bcl-2. The microvessel density (MVD) was calculated by counting the factor VIII-positive endothelial cells. Our results showed that after treatment with EFH, the apoptosis rate of Hep-G2 cells was enhanced in a concentration- and time-dependent manner. Two weeks after the treatment, the average tumor volume, the necrosis rate and the growth rate of the implanted tumor in group C were significantly different from those in groups A and B (P<0.05). MVD and VEGF expressions were significantly decreased in the group C when compared with those in groups B (P<0.05 for all). The Bax expression was weakest in group A and strongest in group C. The expressions of P53 and Bcl-2 were minimal in group C and maximal in group A. There were significant differences in the expressions of P53, Bax and Bcl-2 among the 3 groups (P<0.05 for all) and there was significant difference between group B and group C (P<0.05). It was concluded that EFH could suppress not only the growth of HCC cells but also tumor angiogenesis and it can induce the apoptosis of HCC cells. EFH serves as an alternative for the treatment of HCC.