Abstract Background Circular RNAs (circRNAs) play vital roles in hepatocellular carcinoma development. However, the role and mechanism of circRNA hsa_circ_0000517 (circ_0000517) in hepatocellular carcinoma development were largely unknown. Methods 45 paired tumor and adjacent nontumor samples were collected from hepatocellular carcinoma patients. The levels of circ_0000517, miR-326 and insulin-like growth factor type 1 receptor (IGF1R) were detected via quantitative reverse transcription polymerase chain reaction or western blot. Cell viability, colony ability, migration, invasion and glycolysis were assessed via 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide (MTT), colony formation, western blot, transwell assay, glucose consumption, lactate production or adenosine triphosphate (ATP) production. The target correlation between miR-326 and circ_0000517 or IGF1R was analyzed via dual-luciferase reporter analysis. The function of circ_0000517 in vivo was assessed via xenograft model. Results circ_0000517 expression was elevated in hepatocellular carcinoma tissues and cell lines. circ_0000517 knockdown suppressed cell viability, colony formation, migration, invasion and glycolysis. miR-326 was sponged via circ_0000517 and miR-326 knockdown reversed the effect of circ_0000517 silence on hepatocellular carcinoma development. miR-326 overexpression inhibited hepatocellular carcinoma development through targeting IGF1R. circ_0000517 knockdown decreased IGF1R expression by modulating miR-326. circ_0000517 downregulation reduced xenograft tumor growth. Conclusion circ_0000517 knockdown repressed hepatocellular carcinoma development in vitro and in vivo by modulating miR-326 and IGF1R.