Presently, no effective systemic therapy is available for patients with advanced hepatocellular carcinoma (aHCC). We sought to determine whether systemic treatment with pegylated liposomal doxorubicin (PLD) would yield a response rate of 20% in chemotherapy naïve patients with aHCC. The study was designed according to the phase II Gehan two-step procedure with a precision of 10%. Enrollment criteria included histological diagnosis and radiological documentation of unresectable/metastatic HCC, WHO PS 0-2, relatively normal organ function, life expectancy greater than three months, lack of cardiomyopathy and active cardiac disease NYHA > or = II. PLD (40 mg/m(2) IV 1h-infusion) was administered on d1 q 4 wk and response to treatment was evaluated radiologically every 3rd cycle (WHO-criteria). Secondary endpoints included overall (OS) and progression free survival (PFS) and registration of toxicity. The median number of administered PLD cycles was 3. The best radiological response among the first 14 patients was 1 PR, 5 SD, 3 PD, and 6 NE due to progressive disease clinically (Step 1). The 15th patient did not respond to the PLD-therapy and the study was closed for accrual as the pre-planned analysis could be executed (Step 2). A response rate > or = 20% could be ruled out. The median PFS and OS survival was 82 days and 130 days, respectively. Adverse events were generally mild in the subgroup of patients without signs of moderate hepatic failure at base line. Patients with WHO PS 2, liver tumour involvement >50%, bilirubin > or = 34 micromol/L, albumin <33 g/L, and/or Child Pugh B were unlikely to survive >90 days. PLD can be delivered safely in patients with aHCC and no signs of moderate hepatic failure. The therapy resulted, however, in few responses or cases of disease stabilization and has thus very limited activity in aHCC. Future studies on systemic chemotherapy should focus on patients without moderate hepatic failure, with WHO PS <2, and with liver tumour involvement <50%.