In this study, everolimus (RAD001) was used to determine the role of mammalian target of rapamycin (mTOR) in hepatocarcinogenesis. We show that RAD001 effectively inhibits proliferation of hepatocytes during chronic liver injury. Remarkably, the ability of RAD001 to impair cell cycle progression requires activation of the DNA damage response; loss of p53 significantly attenuates the antiproliferative effects of mTOR inhibition. RAD001 modulates the expression of specific cell cycle–related proteins and the assembly of cyclin–cyclin‐dependent kinase complexes to prevent cell cycle progression. Furthermore, RAD001 sustains the apoptosis sensitivity of hepatocytes during chronic liver injury by inhibiting p53‐induced p21 expression. Long‐term treatment with RAD001 markedly delays DNA damage–induced liver tumor development. Conclusion: We provide evidence that mTOR inhibition has a substantial effect on sequential carcinogenesis and may offer an effective strategy to delay liver tumor development in patients at risk. (HEPATOLOGY 2009;50:500–509.)