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Abstract Liver cancer, comprised primarily of hepatocellular carcinoma (HCC), is the third leading cause of cancer deaths worldwide and increasing in Western countries. We previously identified the transcription factor zinc fingers and homeoboxes 2 (Zhx2) as a regulator of hepatic gene expression, and many Zhx2 target genes are dysregulated in HCC. Here, we investigate HCC in Zhx2‐deficient mice using the diethylnitrosamine (DEN)–induced liver tumor model. Our study using whole‐body Zhx2 knockout (Zhx2KO) mice revealed the complete absence of liver tumors 9 and 10 months after DEN exposure. Analysis soon after DEN treatment showed no differences in expression of the DEN bioactivating enzyme cytochrome P450 2E1 (CYP2E1) and DNA polymerase delta 2, or in the numbers of phosphorylated histone variant H2AX foci between Zhx2KO and wild‐type (Zhx2wt) mice. The absence of Zhx2, therefore, did not alter DEN bioactivation or DNA damage. Zhx2KO livers showed fewer positive foci for Ki67 staining and reduced interleukin‐6 and AKT serine/threonine kinase 2 expression compared with Zhx2wt livers, suggesting that Zhx2 loss reduces liver cell proliferation and may account for reduced tumor formation. Tumors were reduced but not absent in DEN‐treated liver‐specific Zhx2 knockout mice, suggesting that Zhx2 acts in both hepatocytes and nonparenchymal cells to inhibit tumor formation. Analysis of data from the Cancer Genome Atlas and Clinical Proteomic Tumor Consortium indicated that ZHX2 messenger RNA and protein levels were significantly higher in patients with HCC and associated with clinical pathological parameters. Conclusion: In contrast to previous studies in human hepatoma cell lines and other HCC mouse models showing that Zhx2 acts as a tumor suppressor, our data indicate that Zhx2 acts as an oncogene in the DEN‐induced HCC model and is consistent with the higher ZHX2 expression in patients with HCC.