Introduction: Patients with primary biliary cholangitis (PBC) are at increased risk for development of hepatocellular carcinoma (HCC), particularly in the presence of comorbidities such as excessive alcohol consumption. Although liver fibrosis is an important risk factor for HCC development, earlier predictors of future HCC development in livers with little fibrosis are needed but not well defined. The transforming growth factor (TGF)-\beta/Smad signaling pathway participates importantly in hepatic carcinogenesis. Phosphorylated forms (phospho-isoforms) in Smad-related pathways can transmit opposing signals: cytostatic C-terminally-phosphorylated Smad3 (pSmad3C) and carcinogenic linker-phosphorylated Smad3 (pSmad3L) signals. Methods and results: To assess the balance between Smad signals as a biomarker of risk, we immunohistochemically compared Smad domain-specific Smad3 phosphorylation patterns among 52 PBC patients with various stages of fibrosis and 25 non-PBC patients with chronic hepatitis C virus infection. HCC developed in 7 of 11 PBC patients showing high pSmad3L immunoreactivity, but in only 2 of 41 PBC patients with low pSmad3L. In contrast, 9 of 20 PBC patients with minimal Smad3C phosphorylation developed HCC, while HCC did not occur during follow-up in 32 patients who retained hepatic tumor-suppressive pSmad3C. Further, PBC patients whose liver specimens showed high pSmad3L positivity were relatively likely to develop HCC even when little fibrosis was evident. Conclusion: In this study, Smad phospho-isoform status showed promise as a biomarker predicting likelihood of HCC occurrence in PBC. Eventually, therapies to shift favorably Smad phospho-isoforms might decrease likelihood of PBC-related HCC.