LAIR1, a receptor found on immune cells, is capable of binding to collagen and is involved in immune‐related diseases. However, the precise contribution of LAIR1 expressed on hepatocellular carcinoma (HCC) cells to tumor microenvironment is still unclear. In our study, bioinformatics analysis and immunofluorescence were employed to study the correlation between LAIR1 levels and clinical indicators. Transwell and scratch tests were used to evaluate how LAIR1 affected the migration and invasion of HCC cells. The chemotactic capacity and alternative activation of macrophages were investigated using RT‐qPCR, transwell, and immunofluorescence. To investigate the molecular mechanisms, transcriptome sequencing analysis, Western blot, nucleus/cytoplasm fractionation, ELISA, and cytokine microarray were employed. We revealed a significant correlation between the presence of LAIR1 and an unfavorable outcome in HCC. We indicated that LAIR1 promoted migration and invasion of HCC cells through the AKT‐IKKβ‐p65 axis. Additionally, the alternative activation and infiltration of tumor‐associated macrophages induced by LAIR1 were reliant on the upregulation of IL6 and CCL5 within this axis, respectively. In conclusion, blocking LAIR1 was found to be an effective approach in combating the cancerous advancement of HCC.