Background & Aims: Due to its anatomic connection, the liver is constantly exposed to gut-derived bacterial products or metabolites. Disruption of gut homeostasis is associated with many human diseases. The aim of this study was to determine the role of gut homeostasis in initiation and progression of hepatocellular carcinoma (HCC). Methods: Disruption of intestinal homeostasis by penicillin or dextran sulfate sodium (DSS) and its restoration by probiotics were applied in a diethylnitrosamine (DEN) model of rat hepatocarcinogenesis. Results: Patients with liver cirrhosis and HCC had significantly increased serum endotoxin levels. Chronic DEN treatment of rats was associated with an imbalance of subpopulations of the gut microflora including a significant suppression of Lactobacillus species, Bifidobacterium species and Enterococcus species as well as intestinal inflammation. Induction of enteric dysbacteriosis or intestinal inflammation by penicillin or DSS, respectively, significantly promoted tumor formation. Administration of probiotics dramatically mitigated enteric dysbacteriosis, ameliorated intestinal inflammation, and most importantly, decreased liver tumor growth and multiplicity. Interestingly, probiotics not only inhibited the translocation of endotoxin, which bears pathogen-associated molecular patterns (PAMPs) but also the activation of damage-associated molecular patterns (DAMPs) such as high-mobility group box 1 (HMGB1). As a result, the production of pro- and anti-inflammatory cytokines was skewed in favor of a reduced tumorigenic inflammation in the liver. Conclusions: The data highlights the importance of gut homeostasis in the pathogenesis of HCC. Modulation of the gut microbiota by probiotics may represent a new avenue for therapeutic intervention to treat or prevent HCC development.