Liver cancer is the second most occurring cancer worldwide and is one of the leading causes of cancer-related deaths. Hepatocellular carcinoma (HCC) is the most common (80%-90%) type among malignant liver cancers. Sarcopenia occurs very early in HCC and can predict and provide an opportunity to improve muscle health before engaging in the treatment options such as loco-regional, systemic, and transplant management. Multiple prognostic stating systems have been developed in HCC, such as Barcelona Clinic Liver Cancer, Child-Pugh score and Albumin-Bilirubin grade. However, the evaluation of patients’ performance status is a major limitation of these scoring systems. In this review, we aim to summarize the current knowledge and recent advances about the role of sarcopenia in cirrhosis in general, while focusing specifically on HCC. Additionally, the role of sarcopenia in predicting clinical outcomes and prognostication in HCC patients undergoing loco-regional therapies, liver resection, liver transplantation and systematic therapy has been discussed. A literature review was performed using databases PubMed/MEDLINE, EMBASE, Cochrane, Web of Science, and CINAHL on April 1, 2021, to identify published reports on sarcopenia in HCC. Sarcopenia can independently predict HCC-related mortality especially in patients undergoing treatments such as loco-regional, surgical liver transplantation and systemic therapies. Basic research is focused on evaluating a balance of anabolic and catabolic pathways responsible for muscle health. Early clinical studies have shown promising results in methods to improve sarcopenia in HCC which can potentially increase prognosis in these patients. As sarcopenia occurs very early in HCC, it can predict and provide an opportunity to improve muscle health before engaging in the treatment options such as loco-regional, systemic, and transplant management. Further, sarcopenia measurement can obviate the confounding caused by the abdominal ascites in these patients. The use of sarcopenia can add to the existing scoring systems to better prognosticate the HCC.