Fibroblast activation protein (FAP) is the member of Dipeptidyl Peptidase IV (DPIV) gene family that is most similar to DPIV. Four members of this family, DPIV, FAP, DP8 and DP9 possess a rare catalytic activity, hydrolysis of a prolyl bond two residues from the substrate N terminus. Crystal structures show that the soluble form of FAP comprises two domains, an alpha/beta-hydrolase domain and an 8-blade beta-propeller domain. The interface between these two domains forms the catalytic pocket, and an opening for substrate access to the internal active site. The FAP homodimer is structurally very similar to DPIV but FAP glycoprotein expression is largely confined to mesenchymal cells in diseased and damaged tissue, notably the tissue remodelling region in chronically injured liver. FAP peptide substrates include denatured collagen and alpha2-antiplasmin. The functional roles of FAP in tumors and fibrotic tissue are not fully understood. This review places FAP in the context of chronic liver injury pathogenesis.