Growth arrest and DNA damage-inducible protein (GADD34/Ppp1r15a) is induced by various stimuli including DNA damage and ER stress. DNA damage and oncogene activation, accompanied by tumor-specific DNA repair defects and a failure to stall the cell cycle, are early markers of hepatocellular carcinoma (HCC). However, whether GADD34 accounts for regulating HCC tumorigenesis remains elusive. Here, we demonstrated that GADD34 expression was upregulated in the liver of mice after exposure to a carcinogen, diethylnitrosamine (DEN). In both acute and chronic DEN treatment models, GADD34 deficiency not only decreased oncogene expression, but also reduced hepatic damage. Moreover, loss of GADD34 attenuated immune cell infiltration, pro-inflammatory cytokine expression and hepatic compensatory proliferation. Finally, GADD34-deficient mice showed impaired hepatocarcinogenesis. Thus, the process of DEN-induced HCC proceeded as follows. First, DEN treatment induced DNA damage in hepatocytes, resulting in elevated expression of GADD34 in the liver. The increased expression of GADD34 augmented hepatic necrosis followed by elevated expression of interleukin (IL)-1β and monocyte chemoattractant protein 1. This process promoted immune cell infiltration and Kupffer cell/macrophage activation followed by production of reactive oxygen species and pro-tumorigenic cytokines such as IL-6 and tumor necrosis factor-α. The pro-tumorigenic cytokines stimulated compensatory proliferation of surviving and mutant hepatocytes. Together with oncogene c-Myc expression, these processes led to HCC. Our results suggest therapeutic opportunities for HCC by targeting GADD34-related pathways.