To determine the frequency of hepatocellular cancer in corticosteroid-treated severe autoimmune chronic active hepatitis and to identify risk factors for its development, 124 patients who were selected by uniform criteria, treated comparably and followed systematically for 111 +/- 6 months were evaluated. Hepatocellular cancer was diagnosed in three patients (2%) after 66, 99 and 174 months of observation, respectively. The incidence of hepatocellular cancer was 1 per 350 patient-years of follow-up. All three patients with hepatocellular cancer had cirrhosis for at least 5 years. The frequency of neoplasm in patients with cirrhosis of at least 5 years' duration was 7%. The incidence of hepatocellular cancer in these patients with cirrhosis was 1 per 182 patient-years of follow-up, and the probability of tumor was 29% after 13 years. Late elevation of the serum alpha-fetoprotein level was associated with the presence of neoplasm but normal levels did not exclude the diagnosis. We conclude that patients with corticosteroid-treated severe autoimmune chronic active hepatitis are at risk for hepatocellular cancer. This risk is greatest in patients with cirrhosis for at least 5 years. Such patients are candidates for cancer surveillance.