Hepatic fibrosis is a wound-healing response to chronic liver injury, which if persistent can lead to cirrhosis and liver failure. Activation of hepatic stellate cells (HSCs), leading to accumulation of extracellular matrix, is the central event of fibrogenesis. Exciting progress has been made in understanding the molecular basis of this process. Major advances include: (1) elucidation of the effects (and signalling pathways) of key cytokines on HSCs; (2) understanding the transcriptional regulation of HSC activation; (3) characterisation of matrix proteases and their inhibitors; (4) demonstration of apoptosis as an important event in the resolution of hepatic fibrosis, and identification of its mediators;(5) elucidation of the complex and dynamic interaction between HSCs and matrix; and (6) understanding the role of other cellular elements in hepatic fibrosis and their interaction with HSCs. Ongoing research with gene analysis using cDNA or oligonucleotide microarrays, or transcriptional profiling, will further increase our knowledge of the regulation of the process. Ultimately,advances in the understanding of the molecular biology of hepatic fibrosis are critical to the development of effective, targeted antifibrotic therapy that might benefit millions of patients with chronic liver disease worldwide.