Liver fibrosis is a major cause of morbidity and mortality worldwide due to chronic viral hepatitis and, more recently, from fatty liver disease associated with obesity. Hepatic stellate cell activation represents a critical event in fibrosis because these cells become the primary source of extracellular matrix in liver upon injury. Use of cell-culture and animal models has expanded our understanding of the mechanisms underlying stellate cell activation and has shed new light on genetic regulation, the contribution of immune signaling, and the potential reversibility of the disease. As pathways of fibrogenesis are increasingly clarified, the key challenge will be translating new advances into the development of antifibrotic therapies for patients with chronic liver disease.