Abstract Hepatocellular carcinoma (HCC) formation is a multi‐step pathological process that involves evolution of a heterogeneous immunosuppressive tumor microenvironment. However, the specific cell populations involved and their origins and contribution to HCC development remain largely unknown. Here, comprehensive single‐cell transcriptome sequencing was applied to profile rat models of toxin‐induced liver tumorigenesis and HCC patients. Specifically, we identified three populations of hepatic parenchymal cells emerging during HCC progression, termed metabolic hepatocytes (HC Meta ), Epcam + population with differentiation potential (EP +Diff ) and immunosuppressive malignant transformation subset (MT Immu ). These distinct subpopulations form an oncogenic trajectory depicting a dynamic landscape of hepatocarcinogenesis, with signature genes reflecting the transition from EP +Diff to MT Immu . Importantly, GPNMB + Gal‐3 + MT Immu cells exhibit both malignant and immunosuppressive properties. Moreover, SOX18 is required for the generation and malignant transformation of GPNMB + Gal‐3 + MT Immu cells. Enrichment of the GPNMB + Gal‐3 + MT Immu subset was found to be associated with poor prognosis and a higher rate of recurrence in patients. Collectively, we unraveled the single‐cell HCC progression atlas and uncovered GPNMB + Gal‐3 + parenchymal cells as a major subset contributing to the immunosuppressive microenvironment thus malignance in HCC.