Telomere shortening and inactivation of cell cycle checkpoints characterize carcinogenesis. Whether these molecular features coincide at specific stages of human hepatocarcinogenesis is unknown. The preneoplasia-carcinoma sequence of human HCC is not well defined. Small cell changes (SCC) and large cell changes (LCC) are potential precursor lesions. We analyzed hepatocellular telomere length, the prevalence of DNA damage, and the expression of p21 and p16 in biopsy specimens of patients with chronic liver disease (n ؍ 27) that showed different precursor lesions and/or HCC: liver cirrhosis (n ؍ 25), LCC (n ؍ 26), SCC (n ؍ 13), and HCC (n ؍ 13). The study shows a decrease in telomere length in nondysplastic cirrhotic liver compared with normal liver and a further significant shortening of telomeres in LCC, SCC, and HCC. HCC had the shortest telomeres, followed by SCC and LCC. Hepatocytes showed an increased p21 labeling index (p21-LI) at the cirrhosis stage, which remained elevated in most LCC. In contrast, most SCC and HCC showed a strongly reduced p21-LI. Similarly, p16 was strongly expressed in LCC but reduced in SCC and not detectable in HCC. ␥H2AX-DNA-damage-foci were not detected in LCC but were present in SCC and more frequently in HCC. These data indicate that LCC and SCC represent clonal expansions of hepatocytes with shortened telomeres. Conclusion: The inactivation of cell cycle checkpoints coincides with further telomere shortening and an accumulation of DNA damage in SCC and HCC, suggesting that SCC represent more advanced precursor lesions compared with LCC. (HEPATOLOGY 2007;45:968-976.) H CC represents the fifth most common neoplasm in humans. 1 Treatment options for HCC patients are limited, and the disease is often diagnosed at an advanced stage. 2 The molecular pathogenesis of hepatocarcinogenesis is poorly understood, 3 thus impairing the development of molecular markers, efficient screening procedures, and molecular therapies.HCC rarely evolve in noncirrhotic liver but the risk sharply increases at the cirrhosis stage of chronic liver diseases, with the yearly incidence of HCC ranging from Gastroenterology, Hepatology, and Endocrinology, Medical School Hannover, Carl-Neuberg-Strasse 1, 30625 Hannover, Germany. E-mail: Rudolph.Lenhard@MH-hannover.de; fax: 0049-511-532-6998, or to: Massimo Roncalli, Department of Pathology, University of Milan and IRCCS Humanitas Clinical Institute, Via Manzoni 56, 20089 Rozzano (Milan), Italy. E-mail: massimo.roncalli@unimi.it; fax: 0039-02-82244791. Copyright © 2007 (2) small cell changes/dysplasia (SCC). 13,14 Whether both of these lesions represent true precursor lesions and which of these precursors is more closely related to HCC are intensely debated. [7][8][9][10][11][12] On the molecular level, HCC are characterized by massive chromosomal instability (CIN) in more than 95% of cases, 15-17 and telomere shortening 18,19 and loss of p53-checkpoint function in more than 70% of the cases. 3,20 Experimental data from telomerase-deficient mic...