We have previously suggested that dysplastic nodules (also referred to as "adenomatous hyperplasia" or "macroregenerative nodules"), likely precursors of hepatocellular carcinoma (HCC), develop as an infiltrating clonal expansion, in advance of or parallel to cirrhosis. As part of this hypothesis, to explain aspects of their gross and microscopic appearance, we suggested that dysplastic nodules are resistant to the scarring process affecting the rest of the liver. We sought to test this hypothesis by examining the distribution of activated hepatic stellate cells (HSCs), the hallmark of hepatic scarring, in cirrhotic nodules, dysplastic nodules and HCC. We immunohistochemically stained 56 cirrhotic nodules, 20 low grade dysplastic nodules, 27 high grade dysplastic nodules, and 20 HCCs with monoclonal antibodies against alpha-smooth muscle actin to identify activated HSCs. Distribution and number of HSCs were graded semiquantitatively (0 to 4+). In our results, HSCs were significantly less widespread in dysplastic nodules than in cirrhotic nodules or in HCCs (both: p < 0.00001). HSCs were also more prominent in the periphery of dysplastic nodules than in the center, though still fewer in number than in cirrhotic nodules. In conclusion, the low number of activated HSCs in dysplastic nodules, compared to both cirrhotic nodules and HCC, supports our hypothesis concerning dysplastic nodule development: that they arise as clonal expansions of neoplastic hepatocytes in advance of, or parallel to, the development of cirrhosis.