Shugan-Huayu powder (SHP) has been administered to outpatients with chronic liver disease without clear anti-fibrosis mechanism. To investigate the anti-fibrotic effects of SHP on liver fibrosis in a rat model and in hepatic stellate cells (HSCs) in vitro, rats were gavaged with CCl4 at 1.0 g/kg body weight twice a week for 8 weeks to induce liver fibrosis and the rats were randomly assigned to one of the three groups: -CCl4 alone, low-dose SHP and high-dose SHP. SHP was given by gavages 5 times a week for 8 weeks. Serum, livers and HSCs were assayed for serology, pathology, western blot, zymography and quantitative RT-PCR. Hepatic function improved as decreased serum aspartate aminotransferase and alanine aminotransferase, and collagen deposition and active HSCs were significantly reduced in CCl4-induced liver by SHP treatment. The expression of matrix metalloproteinase-2 (MMP-2) and transforming growth factor-beta1 (TGF-beta1) mRNA in fibrotic liver showed significant downregulation after SHP treatment. In vitro, inhibition of alpha-smooth muscle actin (alpha-SMA) expression and MMP-2 secretion of active HSCs were also noticed by SHP treatment. SHP has an antifibrotic effect on CCl4-induced liver fibrosis in rats. Anti-fibrotic mechanisms were probably inhibiting activation of HSCs and decreased expression of MMP-2 and TGF-beta1.