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Aim: Neoadjuvant transcatheter arterial chemoembolization (TACE) for large tumors is controversial, especially in the minimally invasive surgery era. The aim of this study was to compare features between groups treated with neoadjuvant TACE followed by surgery (TACE + surgery) or upfront surgery for hepatocellular carcinoma >5 cm. Methods: In this exploratory, multicenter, randomized phase I study, the primary measure was 2‐year disease‐free survival (DFS). Secondary measures were resection rate, necrosis rate by TACE, 2‐year overall survival, and site of recurrence. A total of 30 patients were randomly allocated to each arm. Results: The two arms did not differ in patient characteristics. The median time to surgery from randomization was 48 days for TACE + surgery and 29 for surgery only (p < 0.001). Postoperative morbidities did not differ between arms. The 2‐year DFS, overall survival, and resection rates were 56.7%, 80.0%, and 93.3%, respectively, in the TACE + surgery arm, and 56.1%, 89.9%, and 90.0% in the upfront surgery arm. Minimally invasive surgery was carried out in 35.7% in the TACE + surgery arm and in 29.6% in the upfront surgery arm. The median necrosis rate by TACE was 90.0%. In resected specimens, invasion to the hepatic vein was less with TACE + surgery (3.6% vs. 22.2%, p = 0.0380). In cases of 100% necrosis with TACE, 2‐year DFS was 100%. Site of recurrence did not differ between groups. Conclusion: Neoadjuvant TACE did not improve 2‐year DFS, and neoadjuvant TACE allowed delay of surgical treatment without increased morbidity and cancer progress. Clinical trial registration: UMIN: 000005241. [ABSTRACT FROM AUTHOR]