Hepatocellular carcinoma (HCC) is clinically distinguished by its covert onset, rapid progression, high recurrence rate, and poor prognosis. Studies have revealed that SETDB1 (SET Domain Bifurcated 1) is a histone H3 methyltransferase located on chromosome 1 and plays a crucial role in carcinogenesis. Therefore, we aimed to evaluate the clinical significance of SETDB1 expression in HCC. In patients with HCC, elevated levels of SETDB1 correlated with a poorer overall survival (OS) rate, marking it as an independent prognostic factor for HCC, as revealed by both univariate and multivariate Cox analyses. Furthermore, we utilized the SangerBox and TISIDB databases to profile the tumor immune microenvironment in HCC, including scoring the tumor microenvironment and assessing immune cell infiltration. The TIDE algorithm was employed to examine the association between SETDB1 expression and immune responses. Our findings indicated that SETDB1 expression negatively correlated with the majority of immune cells, a wide range of immune cell marker genes, and numerous immune pathways, thereby leading to the reduced effectiveness of immune checkpoint inhibitors. Lastly, both in vivo and ex vivo experiments were conducted to substantiate the role of SETDB1 in HCC tumorigenesis. In conclusion, the upregulation of SETDB1 is associated with a poorer prognosis in HCC patients and inversely correlates with immune cell infiltration, potentially serving as a predictive marker for immunotherapy response.