Pathobiological functions and metabolism of retinoids (vitamin A and its derivatives) in liver fibrosis and hepatocellular carcinoma (HCC) are discussed in the present review. Retinoic acid (RA, active metabolite) exacerbates liver fibrosis that is not accompanied by hepatic necroinflammation, in which RA acts directly on hepatic stellate cells (HSCs); RA enhances plasminogen activator/plasmin levels and thereby induces proteolytic activation of latent transforming growth factor-beta (TGF-beta), a strong fibrogenic cytokine, resulting in enhanced collagen production. We have developed a protease inhibitor, camostat mesilate, that suppresses TGF-beta activation and thereby inhibits the transformation of HSCs, leading to reduced matrix production by the cells. The compound is effective not only in preventing but also in reducing hepatic fibrosis in rats when administered orally. HCC is refractory to RA due to its local depletion in the tumors and also due to malfunction of its nuclear receptor, retinoid X receptor-alpha (RXRalpha) Oral supplementation of a synthetic retinoid named acyclic retinoid led to the disappearance of serum lectin-reactive alpha-fetoprotein (AFP-L3) and subsequently suppressed posttherapeutic recurrence of HCC in cirrhotic patients. These results suggest eradication of AFP-L3-producing latent malignant clones from the liver by the retinoid. We propose the concept of "clonal deletion" therapy for cancer chemoprevention, a new category of cancer chemotherapy.