Although cancer patients exhibit a generalized immunosuppressive status, substantial evidence indicates that the inflammatory reaction at a tumor site can promote tumor growth and progression. Hepatocellular carcinoma (HCC) is usually derived from inflamed cirrhotic liver with extensive leukocyte infiltration. We recently found that proinflammatory T helper (Th)17 cells are accumulated in HCC tissue, where they promote disease progression by fostering angiogenesis. Here we show that interleukin (IL)‐17‐producing cells were enriched predominantly in peritumoral stroma of HCC tissues, and their levels were well correlated with monocyte/macrophage density in the same area. Most peritumoral CD68⁺ cells exhibited an activated phenotype. Accordingly, tumor‐activated monocytes were significantly superior to the suppressive tumor macrophages in inducing expansion of Th17 cells from circulating memory T cells in vitro with phenotypic features similar to those isolated from HCCs. Moreover, we found that tumor‐activated monocytes secreted a set of key proinflammatory cytokines that triggered proliferation of functional Th17 cells. Inhibition of monocytes/macrophages inflammation in liver markedly reduced the level of tumor‐infiltrating Th17 cells and tumor growth in vivo. Conclusion: The proinflammatory Th17 cells are generated and regulated by a fine‐tuned collaborative action between different types of immune cells in distinct HCC microenvironments, and allows the inflammatory response of activated monocytes to be rerouted in a tumor‐promoting direction. Selectively modulating the “context” of inflammatory response in tumors might provide a novel strategy for anticancer therapy. (HEPATOLOGY 2009.)