Hepatocellular carcinoma (HCC) is one of the deadliest cancers. The retinoblastoma protein (RB1), a regulator of cell proliferation, is functionally inactivated in HCC by CYCLIN D/E-mediated phosphorylation. However, the mechanism of RB1-inactivation is unclear because only small percentages of HCCs exhibit amplification of CYCLIN D/E or mutations in the CDK-inhibitory genes. We show that FOXM1, which is overexpressed and critical for HCC, plays essential roles in inactivating RB1 and suppressing RB1-induced senescence of the HCC cells. Mechanistically, FOXM1 binds RB1 and DNMT3B to repress the expression of FOXO1, leading to a decrease in the levels of the CDK-inhibitors, creating an environment for phosphorylation and inactivation of RB1. Consistent with that, inhibition of FOXM1 causes increased expression of FOXO1 with consequent activation of RB1, leading to senescence of the HCC cells, in vitro and in vivo. Also, repression-deficient mutants of FOXM1 induce senescence that is blocked by depletion of RB1 or FOXO1. We provide evidence that human HCCs rely upon this FOXM1-FOXO1 axis for phosphorylation and inactivation of RB1. The observations demonstrate the existence of a new autoregulatory loop of RB1-inactivation in HCC involving a FOXM1-FOXO1 axis that is required for phosphorylation of RB1 and for aggressive progression of HCC.