MDIG is known to be overexpressed in many types of human cancers and has demonstrated predictive power in the prognosis of cancer, although the functions and mechanisms of MDIG in liver cancer, especially in hepatocellular carcinoma (HCC), are still unknown. In this study, we report that MDIG and MYC were negatively regulated by IKZF1. MDIG overexpression substantially promoted HCC cell proliferation, cell migration and spreading, whereas knockdown of MDIG would reverse above-mentioned effect. MDIG effects on tumour cell growth were further demonstrated in a tumour xenograft model. Moreover, MDIG had effects on the level of p21 (CIP1/WAF1) via H3K9me3 expression in HCC. MDIG was also found to be closely related to the sorafenib resistance of HCC cells in vitro. Clinically, we found that MDIG was frequently overexpressed in human HCCs (69.7%; n= 155) and was significantly associated with histological grade and hepatitis B virus infection. Our findings indicate that MDIG plays an important role in HCC progression via MDIG/H3K9me3/p21 (CIP1/WAF1) signalling and serves as a potential therapeutic target.