Purpose Sorafenib is currently the only Food and Drug Administration-approved first-line therapy for patients with advanced hepatocellular carcinoma. There are few data examining how sorafenib starting dose may influence patient outcomes and costs. Patients and Methods We retrospectively evaluated 4,903 patients from 128 Veterans Health Administration hospitals who were prescribed sorafenib for hepatocellular carcinoma between January 2006 and April 2015. After 1:1 propensity score matching to account for potential treatment bias, hazard ratios (HRs) were calculated using Cox regression and were tested against a noninferiority margin of HR = 1.1. A matched multivariate logistic regression was performed to adjust for potential confounders. The primary end point was overall survival (OS) of patients who were prescribed standard starting dosage sorafenib (800 mg/d per os) versus that of patients who were prescribed reduced starting dose sorafenib (< 800 mg/d per os). Results There were 3,094 standard dose sorafenib patients (63%) and 1,809 reduced starting dose sorafenib patients (37%). Reduced starting dose sorafenib patients had more Barcelona Clinic Liver Cancer stage D ( P < .001), higher Model for End-Stage Liver Disease Sodium scores ( P < .001), higher Child-Turcotte-Pugh scores ( P < .001), and higher Cirrhosis Comorbidity Index scores ( P = .01). Consequently, reduced starting dose sorafenib patients had lower OS (median, 200 v 233 days, HR = 1.10). After propensity score matching and adjusting for potential confounders, there was no longer a significant OS difference (adjusted hazard ratio [HR], 0.92; 95% CI, 0.83 to 1.01), and this fell significantly below the noninferiority margin ( P < .001). Reduced starting dose sorafenib patients experienced significantly lower total cumulative sorafenib cost and were less likely to discontinue sorafenib because of gastrointestinal adverse effects (8.7% v 10.8%; P = .047). Conclusion The initiation of sorafenib therapy at reduced dosages was associated with reduced pill burden, reduced treatment costs, and a trend toward a decreased rate of discontinuing sorafenib because of adverse events. Reduced dosing was not associated with inferior OS relative to standard dosing.