Epidemiological studies assign a role to insulin signalling deregulation and diabetes mellitus in human hepatocarcinogenesis. The underlying mechanisms, however, remain largely unknown. To unravel the molecular pathogenesis of insulin-induced hepatocarcinogenesis, we generated an experimental animal model: after transplantation of only a low number of isologous pancreatic islets into the livers of diabetic rats, mild diabetes persists and the beta cells are maximally stimulated to permanently secrete insulin. As a consequence, liver acini, draining the hyperinsulinemic blood from islet grafts, show insulin-induced adaptive alterations simultaneously resembling preneoplastic foci of chemically-induced hepatocarcinogenesis models. These lesions progress to hepatocellular tumours within 6 and 24 months. Hepatocarcinogenesis is accompanied by alterations in hepatocytes metabolisms and changes in signal transduction pathways that, in the beginning, can be attributed solely to insulin action. In this review, we summarize our findings that may help understanding the oncogenic potential of diabetes mellitus in the human liver.