Ursodeoxycholic acid (UDCA), a hydrophilic bile acid, has been shown to inhibit mitogenic signaling and suppressing cell proliferation in colonic tumorigenesis. The transcription of DLC1 (deleted in liver cancer), a tumor suppressor gene, is frequently silenced in various types of human cancer. In this study, we postulated that UDCA may inhibit DLC1 protein degradation in hepatocellular carcinoma (HCC) cells, and increased DLC1 expression may suppress HCC cell growth. Human HCC cell lines were used in this study. The methylation status was measured by methylation-specific PCR following sodium bisulfite treatment. Cell proliferation was assessed using an MTS assay. Kinase signaling cascades were evaluated by immunoblot analysis. For assessing ubiquitination, immunoprecipitation analysis was used. To inhibit cellular protein, specific small interfering RNAs (siRNAs) were transfected into cells. DLC1 protein levels increased over time following UDCA treatment. Specifically, UDCA increased the half-life of the DLC1 protein by inhibiting proteasomal degradation of DLC1 without affecting ubiquitination of the DLC1 protein. In addition, HCC cell growth was suppressed following UDCA treatment and this growth suppression was significantly reversed following transfection with DLC1-siRNA. Inhibition of DLC1 increased cellular proliferation; this was reduced after Rho-inhibitor treatment. Finally, RhoA activity was reduced following UDCA treatment; this result was reversed and thus increased following DLC1-siRNA transfection. In conclusion, these results demonstrate that UDCA induces DLC1 protein expression by inhibiting proteasomal DLC1 degradation in a ubiquitin-independent manner, and that DLC1 induction participates in UDCA-induced suppression of HCC cell growth. These observations implicate UDCA as an anti-proliferative agent in HCC.