Immune checkpoint inhibition suggests promising progress for the treatment of advanced hepatocellular carcinoma (HCC). However, the underlying cellular mechanisms remain unclear because liver cancer cells apparently do not upregulate inhibitory checkpoint molecules. Here, we analysed whether regulatory T cells (Tregs) can alternatively trigger checkpoint inhibition pathways in HCC. Using flow cytometry we analysed expression of checkpoint molecules (PD-1, PD-L1, CTLA-4, GITR, Tim-3) on peripheral CD4CD25Foxp3 Tregs and their secretion of inhibitory mediators (IL-10, IL-35, TGF-beta, galectin-9) in 116 individuals (50 patients with HCC, 41 non-tumour bearing liver disease controls, 25 healthy controls). Functional activity of Tregs on T effector cells (IFN-gamma production, cytotoxicity) was characterized in vitro using a lectin-dependent cellular cytotoxicity (LDCC) assay against checkpoint inhibitor-negative P815 target cells. Unlike liver patients without malignancy and healthy controls, the frequency of checkpoint inhibitor-positive Tregs inversely correlated to age of patients with HCC (PD-L1, p = 0.0080; CTLA-4, p = 0.0029) and corresponded to enhanced numbers of Tregs producing IL-10 and IL-35 (p < 0.05 each). Tregs inhibited IFN-gamma secretion and cytotoxicity of CD8 T cells when added to LDCC against P815 cells. Treg-induced inhibition of IFN-gamma secretion could be partially blocked by neutralizing PD-1 and PD-L1 antibodies specifically in HCC patients. In HCC peripheral Tregs upregulate checkpoint inhibitors and contribute to systemic immune dysfunction and antitumoural activity by several inhibitory pathways, presumably facilitating tumour development at young age. Blocking PD-L1/PD-1 interactions in vitro selectively interfered with inhibitory Treg -T effector cell interactions in the patients with HCC and resulted in improved antitumoural activity also against checkpoint inhibitor-negative tumour cells.