Extrahepatic cholestasis leads to complex injury and repair processes that result in bile infarct formation, neutrophil infiltration, cholangiocyte and hepatocyte proliferation, extracellular matrix remodeling, and fibrosis. To identify early molecular mechanisms of injury and repair after bile duct obstruction, microarray analysis was performed on liver tissue 24 hours after bile duct ligation (BDL) or sham surgery. The most upregulated gene identified encodes plasminogen activator inhibitor 1 (PAI-1, Serpine 1), a protease inhibitor that blocks urokinase plasminogen activator (uPA) and tissue-type plasminogen activator (tPA) activity. Because PAI-1, uPA, and tPA influence growth factor and cytokine processing as well as extracellular matrix remodeling, we evaluated the role of PAI-1 in cholestatic liver injury by comparing the injury and repair processes in wild-type (WT) and PAI-1-deficient (PAI-1-/-) mice after BDL. PAI-1-/- mice had fewer and smaller bile infarcts, less neutrophil infiltration, and higher levels of cholangiocyte and hepatocyte proliferation than WT animals after BDL. Furthermore, PAI-1-/- mice had higher levels of tPA activation and mature hepatocyte growth factor (HGF) after BDL than WT mice, suggesting that PAI-1 effects on HGF activation critically influence cholestatic liver injury. This was further supported by elevated levels of c-Met and Akt phosphorylation in PAI-1-/- mice after BDL. In conclusion, PAI-1 deficiency reduces liver injury after BDL in mice. These data suggest that inhibiting PAI-1 might attenuate liver injury in cholestatic liver diseases.