OBJECTIVE To assess whether ultrasound (US)-guided percutaneous acetic acid injection is more effective than percutaneous ethanol injection in the treatment of small hepatocellular carcinoma (HCC). METHODS sixty patients with 1 to 4 HCC smaller than 3 cm entered a randomized controlled trial from August 1993 to September 1995. Thirty one and 29 patients were treated by percutaneous acetic acid injection using 50% acetic acid and percutaneous ethanol injection using absolute ethanol, respectively. There were no significant differences in clinical characteristics and biochemical data between the two groups. RESULTS All original tumors were treated successfully by the chosen therapy. However, local recurrence occurred in 8% of the 38 tumors treated with percutaneous acetic acid injection and 37% of the 35 tumors treated with percutaneous ethanol injection P>0.001). The 1- and 2-year survival rates were 100% and 92% with percutaneous acetic acid injection and 83% and 63% with percutaneous ethanol injection (p=0.0017). Multivariate analysis of prognostic factors revealed that treatment was an independent predictor of survival. CONCLUSIONS percutaneous acetic acid injection is more effective than percutaneous ethanol injection.