In recent years, numerous studies have provided novel insights into the pathomechanisms of pancreatic fibrogenesis. This includes in particular the identification and characterization of the pancreatic stellate cells (PSCs) and their role in the synthesis of extracellular matrix (ECM) proteins. It has become clear that pancreatic stellate cell activation is regulated by a complex network of growth factors and cytokines and results in increased expression and release of collagens I and II, fibronectin and other components of ECM. Among the cytokines involved in PSC activation and other fundamental mechanisms of pancreatic fibrosis, transforming growth factor beta (TGFbeta) is of particular relevance. TGFbeta stimulates PSC activation and induces transcription of ECM proteins mainly via activation of the Smad proteins which regulate gene expression through functional interaction with co-operating partner proteins such as the zinc finger transcription factor Sp1. Recent progress in understanding of the biochemical and molecular mechanisms of pancreatic fibrosis, is reviewed here.