α7-nAChR is a nicotinic acetylcholine receptor [specifically expressed on hepatic stellate cells (HSCs), Kupffer cells, and cholangiocytes] that regulates inflammation and apoptosis in the liver. Thus, targeting α7-nAChR may be therapeutic in biliary diseases. Bile duct ligation (BDL) was performed on wild-type (WT) and α7-nAChR-/- mice. We first evaluated the expression of α7-nAChR by immunohistochemistry (IHC) in liver sections. IHC was also performed to assess intrahepatic bile duct mass (IBDM), and Sirius Red staining was performed to quantify the amount of collagen deposition. Immunofluorescence was performed to assess colocalization of α7-nAChR with bile ducts (costained with CK-19) and HSCs (costained with desmin). The mRNA expression of α7-nAChR, Ki-67/PCNA (proliferation), fibrosis genes (TGF-β1, fibronectin-1, Col1α1, and α-SMA), and inflammatory markers (IL-6, IL-1β, and TNF-α) was measured by real-time PCR. Biliary TGF-β1 and hepatic CD68 (Kupffer cell marker) expression was assessed using IHC. α7-nAChR immunoreactivity was observed in both bile ducts and HSCs and increased following BDL. α7-nAChR-/- BDL mice exhibited decreased (i) bile duct mass, liver fibrosis, and inflammation, and (ii) immunoreactivity of TGF-β1 as well as expression of fibrosis genes compared to WT BDL mice. α7-nAChR activation triggers biliary proliferation and liver fibrosis and may be a therapeutic target in managing extrahepatic biliary obstruction.