Previous studies have shown that Astragalus and Paeoniae Radix Rubra extract (APE) is capable of protecting against liver fibrosis in rats. The hypothesis of the present study was that APE exerts its anti‑fibrotic effect by mediating the transforming growth factor β (TGF‑β)/Smad signaling pathway. In order to investigate this hypothesis, a series of assays were designed to detect the effects of APE on cell proliferation, cell invasion and the activation of hepatic stellate cells (HSCs). In addition, the effects of APE on the TGF‑β/Smad signaling pathway were explored, with the aim of elucidating the underlying mechanisms. HSCs were initially isolated from normal rat liver. A number of assays were then employed in order to evaluate the effects of APE on the function of these cells. Cell proliferation was investigated using an MTT assay and cell invasion was observed with the use of transwell invasion chambers. Collagen synthesis was measured with a 3H‑proline incorporation assay and expression of α‑smooth muscle actin was used to determine the extent of HSC activation. Protein expression induced by TGF‑β1 in HSCs was investigated by western blot and immunofluorescence analyses. Plasminogen activator inhibitor type1 (PAI‑1) and urokinase‑type plasminogen activator (uPA) transcriptional activity was measured using reverse transcription polymerase chain reaction. The results demonstrated that APE (5‑80 µg/ml) significantly inhibited fetal bovine serum‑induced cell proliferation in a dose‑dependent manner. Cell invasion and activation of HSCs induced by TGF‑β1 were disrupted by treatment with APE in a dose‑dependent manner. TGF‑β1 was observed to increase the phosphorylation of Smad2/3, while APE administered at higher doses produced inhibitory effects on Smad2/3 phosphorylation. In addition, administration of APE abrogated the TGF‑β1‑induced reduction in Smad‑7 expression in a dose‑dependent manner. The results further indicated that APE treatment not only reduced PAI‑1 expression, but also increased uPA expression in a dose‑dependent manner. In conclusion, APE exerted inhibitory effects on cell proliferation, invasion and activation of HSCs, and the mechanisms underlying these effects may involve the TGF‑β1/Smad pathway.