Hepatic stellate cells (HSCs) are pericytes of liver in the space between parenchymal cells and sinusoidal endothelial cells of the hepatic lobule. HSCs comprise specialized functions such as vitamin A storage, hemodynamic functions, support of liver regeneration, and immunoregulation. In pathological conditions, HSCs transform to an activated myofibroblasts-like phenotype, start to proliferate, and de novo express several proinflammatory and profibrogenic genes. These processes are particularly important in the development of cirrhosis, portal hypertension, and hepatocellular cancer. This review highlights recent findings in understanding the biology of HSCs and discusses the physiological functions of HSCs and the role of activated HSCs in pathophysiology and disease.