The current guidelines for the diagnosis of hepatocellular carcinoma (HCC) recommend liver biopsy for hepatic nodules which do not demonstrate the typical features of HCC on imaging. Thus, while not all HCCs are biopsied for histological confirmation, the nodules that pathologists now encounter on biopsy specimens are frequently well-differentiated early HCCs. This paper reviews the pathological features of HCC and its precursor lesions on liver biopsy specimens, with special emphasis on the differential diagnosis between well-differentiated HCCs and high-grade dysplastic nodules, and discusses the different roles of liver biopsy in diagnosis and management of early and progressed HCC. The potential role of liver biopsy for the development of molecular markers to predict prognosis and response to targeted therapy is also discussed.