Background: Sarcopenia is a common problem in patients with HCC. We aimed to evaluate the prognostic and predictive value of baseline transversal psoas muscle thickness (TPMT) measurement in patients with HCC undergoing immunotherapy. Methods: HCC patients treated with programmed death ligand 1–based therapies between June 2016 and October 2022 at the Vienna General Hospital (n = 80) and the Hôpital Beaujon Clichy (n = 96) were included and followed until April 2023. TPMT at the level of the third lumbar vertebra was measured independently by 2 radiologists to evaluate interreader reliability. TPMT <12 mm/m in men and <8 mm/m in women indicated sarcopenia. Results: Overall, 176 patients (age: 66.3±11.7 y; male: n=143, 81%, Barcelona-Clinic Liver Cancer C: n=121, 69%) were included, of which 131 (74%) exhibited cirrhosis. Interreader agreement for the diagnosis of sarcopenia based on TPMT was 92.6%, and Cohen κ showed a “strong agreement” [κ = 0.84 (95% CI: 0.75–0.92)]. Sarcopenia, present in 58 patients (33%), was associated with shorter median overall survival [7.2 (95% CI: 5.0–9.5) vs. 22.6 (95% CI: 16.4–28.8 months); p < 0.001] and median progression-free survival [3.4 (95% CI: 0.2–6.8) vs. 7.9 (95% CI: 5.8–9.9 months), p = 0.001], and an independent predictor of overall [adjusted HR: 1.63 (95% CI: 1.07–2.48)] and progression-free mortality [adjusted HR: 1.54 (95% CI: 1.06–2.23)] in multivariable analyses. The objective response rate [evaluable in 162 subjects (92.0%)] per modified Response Evaluation Criteria In Solid Tumors (mRECIST) in patients with and without sarcopenia was 22% and 39%, respectively (p = 0.029). Survival and radiological responses were worse in patients with sarcopenia and systemic inflammation [median overall survival: 6.1 (95% CI: 3.6–8.6) mo; median progression-free survival: 2.8 (95% CI: 2.1–3.4) mo; objective response rate=16%; disease control rate=39%]. Conclusions: Evaluation of sarcopenia using TPMT measurement is reliable and identifies HCC patients with a dismal prognosis and response to immunotherapy.