Abstract Background Paracetamol induces hepatotoxicity and subsequent liver injury, which may increase the risk of liver cancer, but epidemiological evidence remains unclear. We conducted this study to evaluate the association between paracetamol use and the risk of liver cancer. Methods This prospective study included 464,244 participants free of cancer diagnosis from the UK Biobank. Incident liver cancer was identified through linkage to cancer and death registries and the National Health Service Central Register using the International Classification of Diseases (ICD)-10 codes (C22). An overlap-weighted Cox proportional hazards model was utilized to calculate the hazard ratio (HR) and 95% confidence interval (CI) for the risk of liver cancer associated with paracetamol use. The number needed to harm (NNH) was calculated at 10 years of follow-up. Results During a median of 12.6 years of follow-up, 627 cases of liver cancer were identified. Paracetamol users had a 28% higher risk of liver cancer than nonusers (HR 1.28, 95% CI 1.06–1.54). This association was robust in several sensitivity analyses and subgroup analyses, and the quantitative bias analysis indicated that the result remains sturdy to unmeasured confounding factors (E-value 1.88, lower 95% CI 1.31). The NNH was 1106.4 at the 10 years of follow-up. Conclusion The regular use of paracetamol was associated with a higher risk of liver cancer. Physicians should be cautious when prescribing paracetamol, and it is recommended to assess the potential risk of liver cancer to personalize the use of paracetamol.