Identification of novel genetic and epigenetic alterations is required for optimal stratification of patients with hepatocellular carcinoma (HCC) at risk for recurrence and adverse prognosis. Coenzyme Q10 (CoQ10), which mediates apoptosis, is synthesized by prenyl diphosphate synthase subunit 2 (PDSS2). In the present study we evaluated the clinical significance and regulatory mechanisms of PDSS2 expression in HCC. PDSS2 expression levels and those of genes encoding potentially interacting proteins as well as the methylation status of the PDSS2 promoter region were analyzed in HCC cell lines. PDSS2 mRNA levels in 151 pairs of resected specimens were determined to evaluate the association of PDSS2 expression and clinicopathological factors. The expression and distribution of PDSS2 were determined using immunohistochemistry. PDSS2 mRNA expression was decreased in six of nine HCC cell lines and significantly correlated with those of hepatocyte nuclear factor 4α. PDSS2 transcription in HCC cells with decreased PDSS2 expression accompanying hypermethylation was reactivated after treating these cells with a methylation inhibitor. Mean expression levels of PDSS2 mRNA relative to that of uninvolved liver diminished gradually in the order of chronic hepatitis to cirrhosis, and each was significantly higher than those of HCCs. PDSS2 and PDSS2 mRNA levels were consistent. Decreased PDSS2 mRNA levels were detected in HCC tissues of 56 patients, correlated with shorter disease-specific survival, and was identified as an independent prognostic factor. PDSS2 is a putative tumor suppressor, and promoter hypermethylation is a key regulatory mechanism in HCC. Decreased levels of PDSS2 mRNA expression may represent a novel biomarker of HCC.