Hepatocellular carcinoma (HCC) is the third leading cause of cancer death globally, and its prevalence and impact are even more profound because sorafenib is the only systemic therapy proven to prolong survival in patients with advanced disease. Randomized phase III trials of other novel targeted agents including sunitinib, linifanib, brivanib, and the combination of sorafenib plus erlotinib have failed to improve overall survival compared with sorafenib as a single agent in the first line setting, as well as compared with placebo in the second-line setting, in the case of brivanib. These negative studies are a sobering reminder of the challenges to clinical research in HCC, including the competing comorbidity of liver dysfunction, marked clinical and biologic heterogeneity, and the unreliability of surrogate endpoints to accurately predict survival. To address these challenges, HCC-specific phase I/Ib cohorts must be used to define the maximum tolerated dose and drug exposure in this organ dysfunction population with high background rates of adverse events and little tolerance for superimposed treatment-related toxicity. Pooled analyses of contemporary randomized trials and database studies should be undertaken to define the strongest prognostic factors for stratification in future phase III studies. Research blood and archival tumor specimens should be collected from patients on clinical trials to intensify the search for biomarkers of responsive or resistant subsets, in parallel with ongoing efforts to improve on radiographic response assessment. Collectively, these and other new strategies are needed to make progress in identifying active novel therapeutics for patients with HCC.