Myofibroblastic-activated hepatic stellate cells are the major source of the collagen I-rich extracellular matrix in liver fibrosis but also produce matrix metalloproteinases, which remodel this protein. We have investigated the role of collagen I proteolysis in both regulating proliferation and maintaining the activated myofibroblastic phenotype of stellate cells in vitro. Compared with stellate cells plated on normal collagen I, those plated on a collagenase-resistant form of collagen I (r/r collagen) had reduced thymidine incorporation and proliferating cell nuclear antigen expression but increased p21 expression. Collagen I was shown to be rendered resistant to matrix metalloproteinases by artificial cross-linking in vitro using tissue transglutaminase exerted similar antiproliferative effects on stellate cells to r/r collagen. Of the stellate cell activation markers examined (tissue inhibitor of metalloproteinases-1, alpha-smooth muscle actin, matrix metalloproteinases-2 and -9, and procollagen I) only the last was decreased by culture on r/r collagen relative to normal collagen I. Antagonists of integrin alphavbeta3, an integrin reported to stimulate stellate cell proliferation, significantly inhibited adhesion, proliferation, and procollagen I synthesis of stellate cells plated on normal collagen I but had reduced effectiveness on these parameters in cells on r/r collagen. We conclude that proliferation of stellate cells is promoted by pericellular collagen I proteolysis acting via alphavbeta3 integrin. Cross-linking of collagen I by tissue transglutaminase, a process known to occur in chronic liver fibrosis, might not only increase its resistance to matrix metalloproteinases thereby inhibiting resolution of fibrosis but also functions to constrain the fibroproliferative process.