Transplantation of bone marrow (BM)-derived endothelial progenitor cells (EPCs) has been reported to improve liver fibrosis, but there is no direct evidence for the mechanism of improvement. We investigated the mechanism in vitro by coculturing BM-derived EPCs with activated hepatic stellate cells (HSCs) to mimic the hepatic environment. EPCs and HSCs were cultured alone and indirectly cocultured at a 1:1 ratio in a Transwell system. The characteristics of HSCs and EPCs were examined at different time points. An invasion assay showed the time-dependent effect on degradation of the extracellular matrix (ECM) layer in EPCs cultured alone. Real-time PCR and enzyme-linked immunosorbent assay analysis revealed that EPCs served as a source of matrix metalloproteinase-9 (MMP-9), and MMP-9 expression levels significantly increased during the 2 d of coculture. CFSE labeling showed that EPCs inhibited proliferation of HSCs. Annexin-V/PI staining, erminal deoxynucleotidyl transferase X-dUTP nick end labeling analysis, and (cleaved) caspase-3 activity revealed that EPCs promoted HSC apoptosis. However, the proliferation and apoptosis of EPCs were unaffected by cocultured HSCs. Coculturing increased the expression of inducible nitric oxide synthase, vascular endothelial growth factor, and hepatocyte growth factor (HGF) in EPCs, promoted differentiation of EPCs, and reduced the expression of types I and III collagens and transforming growth factor beta 1. Knockdown of HGF expression attenuated EPC-induced activation of HSC apoptosis and profibrotic ability. These findings demonstrated that BM-derived EPCs could degrade ECM, promoting activated HSC apoptosis, suppressing proliferation and profibrotic ability of activated HSCs. HGF secretion by EPCs plays a key role in inducing activated HSC apoptosis and HSC profibrotic ability.