BACKGROUND: A nationwide hepatitis B vaccination program was implemented in Taiwan in July 1984. To assess the effect of the program on the development of hepatocellular carcinoma, we studied the incidence of this cancer in children in Taiwan from 1981 to 1994. METHODS: We collected data on liver cancer in children from Taiwan's National Cancer Registry, which receives reports from each of the country's 142 hospitals with more than 50 beds. Data on childhood liver cancer were also obtained from Taiwan's 17 major medical centers. To prevent the inclusion of cases of hepatoblastoma, the primary analysis was confined to liver cancers in children six years of age or older. Data were also obtained on mortality from liver cancer among children. RESULTS: The average annual incidence of hepatocellular carcinoma in children 6 to 14 years of age declined from 0.70 per 100,000 children between 1981 and 1986 to 0.57 between 1986 and 1990, and to 0.36 between 1990 and 1994 (P<0.01). The corresponding rates of mortality from hepatocellular carcinoma also decreased. The incidence of hepatocellular carcinoma in children 6 to 9 years of age declined from 0.52 for those born between 1974 and 1984 to 0.13 for those born between 1984 and 1986 (P<0.001). CONCLUSIONS: Since the institution of Taiwan's program of universal hepatitis B vaccination, the incidence of hepatocellular carcinoma in children has declined.