Due to advances in endoscopic equipment and techniques, preoperative endoscopic biliary drainage (EBD) has been developed to serve as an alternative to percutaneous transhepatic biliary drainage (PTBD). This study sought to clarify the benefit of EBD in comparison to PTBD in patients who underwent radical resections of hilar cholangiocarcinoma. One hundred and forty-one patients underwent radical surgery for hilar cholangiocarcinoma between 2000 and 2008 were retrospectively divided into two groups based on the type of preoperative biliary drainage, PTBD (n = 67) or EBD (n = 74). We investigated if the different biliary drainage methods affected postoperative survival and mode of recurrence after median observation period of 82 months. The survival rate for patients who underwent EBD was significantly higher than those who had PTBD (P = 0.004). Multivariate analysis revealed that PTBD was one of the independent factors predictive of poor survival (hazard ratio: 2.075, P = 0.003). Patients with PTBD more frequently developed peritoneal seeding in comparison to those who underwent EBD (P = 0.0003). PTBD was the only independent factor predictive of peritoneal seeding. In conclusion, EBD might confer an improved prognosis over PTBD due to prevention of peritoneal seeding, and is recommended as the initial procedure for preoperative biliary drainage in patients with hilar cholangiocarcinoma.