A 67-year-old male with type 2 diabetes (T2DM) was diagnosed with postoperative intrahepatic recurrence for hepatocellular carcinoma (HCC). Nine sessions of transarterial chemoembolization (TACE) proved ineffective, and the patient was diagnosed as having TACE-refractory disease and received seven cycles of atezolizumab–bevacizumab combination therapy. After that, the patient developed hyperglycemia with the HbA1c elevation and the marked fasting serum C-peptide reduction and was diagnosed with developed immune-mediated diabetes (IMD) (T2DM exacerbation with insulin-dependent diabetes development). Subsequently, the hepatobiliary enzyme levels, which were high before the systemic therapy, worsened. Thus, we clinically diagnosed an exacerbation of liver injury due to TACE-induced liver injury complicated by drug-induced liver injury such as immune-mediated hepatotoxicity (IMH). Meanwhile, after contrast-enhanced computed tomography revealed complete response, contrast-enhanced ultrasound was performed to assess intrahepatic recurrence. We found that the latter modality allowed earlier and more definitive diagnosis of intrahepatic recurrence of HCC. Subsequently, despite systemic therapy discontinuation and steroids administration, the liver injury worsened, and the patient died. The autopsy revealed intrahepatic recurrence of HCC and extensive arterial obstruction by the beads used for TACE within the liver, which indicated that disturbed circulation was the primary cause of the liver injury and histopathologically confirmed IMD, but not IMH.