Epithelial cell loss alters a tissue's optimal function and awakens evolutionarily adapted healing mechanisms to reestablish homeostasis. Although adult mammalian organs have a limited regeneration potential, the liver stands out as one remarkable exception. Following injury, the liver mounts a dynamic multicellular response wherein stromal cells are activated in situ and/or recruited from the bloodstream, the extracellular matrix (ECM) is remodeled, and epithelial cells expand to replenish their lost numbers. Chronic damage makes this response persistent instead of transient, tipping the system into an abnormal steady state known as fibrosis, in which ECM accumulates excessively and tissue function degenerates. Here we explore the cellular and molecular switches that balance hepatic regeneration and fibrosis, with a focus on uncovering avenues of disease modeling and therapeutic intervention.