Hepatocellular carcinoma (HCC) is the third leading cause of cancer mortality worldwide and is considered to be the outcome of chronic liver inflammation. Currently, the main treatment for HCC is surgical resection. However, survival rates are suboptimal partially because of tumor recurrence in the remaining liver. Our aim was to understand the molecular mechanisms linking liver regeneration under chronic inflammation to hepatic tumorigenesis. Mdr2-KO mice, a model of inflammation-associated cancer, underwent partial hepatectomy (PHx), which led to enhanced hepatocarcinogenesis. Moreover, liver regeneration in these mice was severely attenuated. We demonstrate the activation of the DNA damage-response machinery and increased genomic instability during early liver inflammatory stages resulting in hepatocyte apoptosis, cell-cycle arrest, and senescence and suggest their involvement in tumor growth acceleration subsequent to PHx. We propose that under the regenerative proliferative stress induced by liver resection, the genomic unstable hepatocytes generated during chronic inflammation escape senescence and apoptosis and reenter the cell cycle, triggering the enhanced tumorigenesis. Thus, we clarify the immediate and long-term contributions of the DNA damage response to HCC development and recurrence.