Dicer, a key component of the RNA interference pathway, is also essential for DNA repair. Reactive oxygen species in inflamed liver tissues induce DNA damage and decrease Dicer expression. The downregulation of Dicer, in turn, reduces DNA repair efficiency and leads to increased DNA damage. DNA damage leads to an aggravation of inflammation via various mechanisms. First, it induces the expression of the natural killer group 2D (NKG2D) receptor ligands, and the binding of these ligands to their receptor promotes inflammation. Second, DNA damage promotes the release of nuclear DNA into the cytoplasm. Consequently, the cytosolic DNA sensing machinery induces the secretion of proinflammatory cytokines. Thus, decreased Dicer expression plays a central role in the development of unresolved chronic inflammation, a common and important factor in neoplasia pathogenesis. In addition to promoting inflammation, decreased Dicer expression may promote the development of hepatocellular carcinoma via the following mechanisms. First, decreased Dicer expression reduces DNA repair efficiency, promoting gene mutation and eventually carcinogenesis. Second, Dicer processes 7SL RNA into small fragments that function as dominant negative regulators of the full-length 7SL RNA and interfere with signal recognition particle (SRP) complex formation. Accordingly, a decrease in Dicer expression promotes SRP complex formation via a downregulation of the 7SL RNA fragment biogenesis, which then enhances SRP-mediated protein targeting and increases the translocation and expression of membrane and secretory proteins, which are upregulated in tumor tissues. Finally, decreased Dicer expression may promote carcinogenesis by deregulating miRNA expression.