Background: Management of hepatic hemangioma (HH) in infancy ranges from close monitoring to surgical resection. We analyzed the clinical characteristics and outcomes of HH according to its treatment options, with particular focus on challenging cases. Methods: Data of patients diagnosed with HHs in their first year of life and followed up for at least 1 year were retrospectively reviewed and divided into treatment and observation groups. Serial imaging results, serum alpha-fetoprotein (AFP) levels, medications, and clinical outcomes were compared. The detailed clinical progress in the treatment group was reviewed separately. Results: A total of 87 patients (75 in the observation group and 12 in the treatment group) were included. The median HH size at the initial diagnosis and the maximum size were significantly larger in the treatment group than the observation group (2.2 [0.5–10.3] cm vs. 1.0 [0.4–4.0] cm and 2.1 [0.7–13.2] vs. 1.1 [0.4–4.0], respectively; all p < 0.05]. The median initial and last serum AFP levels were significantly higher in the treatment group than in the observation group (76,818.7 vs. 627.2 and 98.4 vs. 8.7, respectively; all p < 0.05). Serum AFP levels in both groups rapidly declined during the first 3 months of life and were almost undetectable after 6 months. Among the challenging cases, a large (14 × 10 × 6.5 cm sized) focal HH was successfully treated using stepwise medical-to-surgical treatment. Conclusions: Patients with large HH and mild symptoms can be treated using stepwise pharmacotherapy. More aggressive surgical treatment of tumors unresponsive to initial pharmacotherapy may help shorten the treatment period and improve outcomes.