This study was designed to compare the efficacy of laparoscopic hepatectomy (LH) and radiofrequency ablation (RFA) in terms of their therapeutic effect on small hepatocellular carcinoma (SHCC). The SEER database was employed to integrate SHCC patients who had received treatment with either LH (n = 1132) or RFA (n = 797). The LH group (n = 623) and the RFA group (n = 623) were matched with 1:1 propensity score matching (PSM) in order to reduce the possibility of selection bias. The Kaplan–Meier method and Cox proportional hazards regression method were employed to ascertain the prognostic factors associated with overall survival (OS) and disease-specific survival (DSS). Both before and after PSM, the 1, 3 and 5-years OS and DSS were significantly higher in the LH groups compared to the RFA group. Besides, for SHCC with tumor size ≤ 2cm (n = 418), even P values not reaching statistical significance, the survival curves were compatible with a superiority of LH over RFA for OS and DSS in overall (P = 0.054 and P = 0.077), primary SHCC (P = 0.110 and P = 0.058) and recurrent SHCC (P = 0.068 and P = 1.000) cohorts. In contrast, for SHCC with tumor size between 2 and 3 cm (n = 828), LH group always had a better OS and DSS in the all cohorts (all P < 0.05). In addition, higher AFP level, poor differentiation grade, recurrent tumor and treatment type were independent prognostic factors for OS, while poor differentiation grade, larger tumor size and treatment type were the independent prognostic factors for DSS (all P < 0.05). LH was associated with better OS and DSS than RFA in SHCC patients. Even in tumor size ≤ 2 cm, LH still should be the first choice as its long-term survival benefits.