Arachidonic acid 5-lipoxygenase (5-LOX), an enzyme that synthesizes leukotrienes (LTs), is involved in cancer development including proliferation, invasion, metastasis and drug resistance. However, the functional role of 5-LOX in hepatocellular carcinoma (HCC) remains to be elucidated. In this study, we analyzed the contribution of 5-LOX in HCC progression and investigated the potential of targeted therapy. Analysis of 86 resected HCC specimens and the clinical data of 362 cases of liver cancer from The Cancer Genome Atlas Liver Hepatocellular Carcinoma dataset, showed that 5-LOX expression was associated with postoperative survival. The cancer proliferative and stem cell potential were correlated with the levels of 5-LOX in CD163(+) tumor-associated macrophages (TAMs). In an HCC mouse model, CD163(+) TAMs expressed 5-LOX and produced LTB4 and LTC/D/E4; the 5-LOX inhibitor, zileuton, suppressed HCC progression. LTB4 and LTC/D/E4 promoted cancer proliferation and stem cell capacity via phosphorylation of extracellular signal-regulated kinase 1/2 and stem cell-associated genes. Taken together, we identified a novel mechanism of HCC progression in which CD163(+) TAMs express 5-LOX and produce LTB4 and LTC/D/E4, thereby enhancing the proliferative and stem cell potential of HCC cells. Furthermore, inhibition of 5-LOX activity regulates HCC progression, suggesting it has potential as a new therapeutic target.