Background The existence of cirrhosis has been traditionally considered a contraindication, particularly for extensive hepatectomy because mortality and morbidity rates are unacceptably high. Several institutions have reported liver reserve capacity assessment methods. In addition to the Child-Pugh classification, many reports have demonstrated methods for evaluating the liver reserve, including the indocyanine green retention value (ICG-R15) and ICG clearance test (ICG-K). Aim To investigate the use of indocyanine for assessment of hepatic functional reserve in cirrhotic patients undergoing hepatic resection for hepatocellular carcinoma (HCC) with respect to postoperative outcome to identify patients who are at risk of developing liver dysfunction. Patients and methods This was a prospective study performed on 50 patients with hepatic resection. Patients' demographic data, preoperative laboratory investigation, resection type, and postoperative outcomes and complications were recorded from our prospectively maintained database. Their liver function reserve was evaluated by (a) preoperative ICG clearance testing [Plasma Disappearance Rate (PDR), R15] on the day prior to elective liver resection for HCC, along with analysis of postoperative outcomes, and (b) CTComputed Tomograaphy (CT) volumetric measurement at NLI, Menoufia University, Egypt, from January 2019 to December 2021. Results A total of 50 patients [male: 37 (74%) and female: 13 (26%)] with a mean age of 57.74 +/- 7.62 years were included in this study, including 17 (34%) nonanatomical liver resections and 33 (66%) anatomical liver resections. A total of 14 (28%) patients developed postoperative liver dysfunction after liver resection. ICG clearance was significantly associated with liver dysfunction. An optimal cutoff for preoperative ICG clearance to accurately predict liver dysfunction was PDR less than 17.6%/min and R15 more than 10.27%. Conclusion In cirrhotic patients undergoing liver resection for HCC, preoperative findings of ICG clearance test, along with other potential risk factors such as age, type of liver resections and future liver remnant, other liver function tests, Child's risk class, Model for End Stage Liver Disease score, and hemostasis, have to be considered before the decision of liver resection in these patients.