Growing evidence indicates that microRNAs have a significant role in tumor development and may constitute robust biomarkers for cancer diagnosis and prognosis. In this study, we evaluated the clinical and functional relevance of microRNA-122 (miR-122) expression in human hepatocellular carcinoma (HCC). We report that miR-122 is specifically repressed in a subset of primary tumors that are characterized by poor prognosis. We further show that the loss of miR-122 expression in tumor cells segregates with specific gene expression profiles linked to cancer progression, namely the suppression of hepatic phenotype and the acquisition of invasive properties. We identify liver-enriched transcription factors as central regulatory molecules in the gene networks associated with loss of miR-122, and provide evidence suggesting that miR-122 is under the transcriptional control of HNF1A, HNF3A and HNF3B. We further show that loss of miR-122 results in an increase of cell migration and invasion and that restoration of miR-122 reverses this phenotype. In conclusion, miR-122 is a marker of hepatocyte-specific differentiation and an important determinant in the control of cell migration and invasion. From a clinical point of view, our study emphasizes miR-122 as a diagnostic and prognostic marker for HCC progression.