Abstract Purpose: A recent trial has shown that adding transarterial chemoembolization (TACE) to lenvatinib therapy results in enhanced therapeutic efficacy in hepatocellular carcinoma (HCC). We aimed to assess the effectiveness of the lenvatinib and TACE combination in a real-world clinical context for managing HCC and to elucidate the molecular pathways involved. Experimental Design: This retrospective analysis included 199 patients diagnosed with HCC and having intrahepatic lesions between 2018 and 2021. The cohort was divided into those who received lenvatinib plus TACE (n=62, combination group) and those who received lenvatinib monotherapy (n=137, monotherapy group). To further explore the underlying mechanisms, Huh-7 cells were exposed to lenvatinib or a vehicle for 48 hours under normoxic or hypoxic condition. Results: Propensity score-matched analysis revealed a significant improvement in both overall survival (adjusted hazard ratio [aHR], 0.38; 95% CI, 0.24–0.59; P<0.001) and progression-free survival (aHR, 0.41; 95% CI, 0.26–0.64; P<0.001) in the combination group compared to the monotherapy group. In laboratory experiments, under hypoxic conditions, lenvatinib notably attenuated hypoxia-inducible factor-1 alpha (HIF-1α) protein levels in Huh-7 cells without altering its mRNA levels. Intriguingly, lenvatinib facilitated the MDM2-mediated ubiquitination and subsequent degradation of HIF-1α. Additionally, cell viability assays confirmed a significant decrease in Huh-7 cell survival following lenvatinib treatment under hypoxic conditions. Conclusions: The combination of lenvatinib and TACE significantly improved survival in HCC patients. The mechanistic foundation appears to be the lenvatinib-triggered degradation of HIF-1α via the MDM2-dependent ubiquitination pathway, highlighting a potential therapeutic target in HCC treatment.