A controlled prospective study was conducted to evaluate the potential of Syo-saiko-to (Xiao-Chai-Hu-Tang) for the prevention of hepatocellular carcinoma (HCC). Pairs of patients were matched for age, sex, presence of HBs antigen and the scores of the severity of liver dysfunction from 260 cirrhotic subjects. We randomly assigned each patient to receive either a conventional medicine (control group), or 7.5 g/day of Syo-saiko-to (trial group). The patients were monitored during 34 months of treatment, and the incidence of HCC in the two groups were compared. Seventeen patients were found to have HCC in the control group, and nine were found to have HCC in the trial group. The incidence of HCC was significantly lower in the trial group. The results of this study suggested that Syo-saiko-to may prevent or delay the emergence of latent HCC in patients with cirrhosis of the liver.