We examined the effect of interferon (IFN) therapy for chronic active hepatitis (CAH) C in 207 patients by estimating the incidence of hepatocellular carcinoma (HCC) after IFN therapy using the person-years method. Statistical analysis was performed using the Mantel-Haenszel chi-square test. No HCC was detected in patients with normal serum alanine aminotransferase (ALT) levels after IFN therapy (response-effect group), and in patients with both normal serum ALT levels and hepatitis C virus (HCV)-RNA clearance after IFN therapy (complete-responder group). The incidence per 100,000 person-years in the patients with elevated serum ALT level after IFN therapy (other-effects group) were 1968 and 1624, respectively. The incidence in control patients who did not achieve IFN therapy was 901. No statistically significant differences were observed between the other-effects group, non-responder group, and the control group. Our results so far suggest that normalization of the serum ALT levels and/or HCV clearance might reduce the incidence of HCC.