Cadaveric liver transplantation (CLT) is an excellent treatment for early hepatocellular carcinoma (HCC). Its use, however, is limited by the shortage of grafts, with up to 30% of patients developing contraindications to the procedure while waiting for a donor. Living donor liver transplantation (LDLT) has emerged as an alternative to overcome this limitation. We compared the consequences of LDLT versus CLT using a Markov model balancing the gains and losses in life expectancy among donors and recipients. For a 60-year-old recipient with a 70% 5-year survival after transplantation, a 4% monthly drop-out rate, and a donor with 1% mortality, LDLT became more effective than CLT after 3.5 months on the waiting list. These results varied with the probability of developing contraindications to transplantation, the survival after transplantation, and the donor's mortality. For a 12-month delay saved on the waiting list, the gain in survival provided by LDLT compared with CLT ranged between 0 and 2.8 life years depending on survival after transplantation, time spent on the waiting list, and drop-out rate. LDLT was cost-effective (less than $50,000 per quality-adjusted life year saved) in all scenarios of waiting lists exceeding 7 months, and this figure ranged from 2 to 16 months when varying the drop-out rate. LDLT for early HCC offered substantial gains in life expectancy with acceptable cost-effectiveness ratios when the waiting list exceeds 7 months. The gain in life expectancy and the cost-effectiveness of LDLT were more dependent on the drop-out rate and the outcome after transplantation than on donor's mortality.