<b><i>Introduction:</i></b> Atezolizumab and bevacizumab (Ate/Bev) combination has become the new first-line systemic therapy for unresectable hepatocellular carcinoma (HCC). Although several studies reported thyroid dysfunction after treatment with immune checkpoint inhibitors, the clinical and immunological significance of thyroid dysfunction in patients treated with Ate/Bev has not been comprehensively addressed. We aimed to comprehensively evaluate the clinical and immunological implications of thyroid dysfunction in unresectable HCC patients treated with Ate/Bev. <b><i>Methods:</i></b> We enrolled 208 patients with unresectable HCC treated with Ate/Bev from three Korean cancer centers. Thyroid adverse events (AEs) were reviewed, and cytokines and T cells in the blood samples were analyzed at baseline. For external validation, we analyzed clinical outcomes according to thyroid AEs in patients treated with Ate/Bev in the IMbrave150 study. <b><i>Results:</i></b> Forty-one (19.7%) out of 208 patients experienced thyroid dysfunction (hypothyroidism [17.3%] and thyrotoxicosis [5.8%]) after Ate/Bev treatment. Median time to onset of hypothyroidism and thyrotoxicosis after Ate/Bev treatment was 3.5 and 1.3 months, respectively. Patients with thyroid AEs demonstrated significantly better progression-free survival, overall survival, and objective response rate than those without thyroid AEs. These findings were still consistent even after adjusting for confounding factors. Furthermore, favorable survival outcomes in patients with thyroid AEs were also validated in a cohort of IMbrave150 patients. While patients with thyrotoxicosis showed a significantly lower level of baseline IL-6, those with hypothyroidism did not show significant differences in circulating cytokine levels and CD8<sup>+</sup> T-cell fractions. <b><i>Conclusions:</i></b> A fraction of patients with HCC treated with Ate/Bev experienced thyroid dysfunction, and the development of thyroid AEs was associated with favorable clinical outcomes.