During liver injury, quiescent hepatic stellate cells (qHSCs) transdifferentiate into proliferative and fibrogenic activated myofibroblastic phenotype (aHSCs) expressing smooth muscle α-actin (αSMA) and PDGFβR. Their interactions with gut-derived bacterial lipopolysaccharide (LPS) are implicated in hepatic fibrogenesis. However, LPS can also attenuate fibrogenic characteristics of aHSCs. We examined molecular mechanisms of anti-fibrogenic effects of LPS on aHSCs in vitro and in vivo. Culture-activated rat HSCs were exposed to 0-100 ng/ml LPS or its active component diphosphoryl lipid A, and parameters of fibrosis and inflammatory cytokines/chemokines were determined by q-RT-PCR, western and immunohistochemical analyses. In vivo, HSCs were activated by repeated CCl4 administration to rats every 3 days for 3 or 8 weeks, then challenged with LPS (5 mg/kg; ip). HSCs were isolated 24h later and fibrogenic/inflammatory parameters were analyzed. LPS induced phenotypic changes in aHSCs (rounding; size reduction) and loss of proliferation. LPS down-regulated expression of αSMA, PDGFβR, TGFβR1, Col1α1 and fibronectin while up-regulating TNFα, IL6 and CXCL1 expression. LPS did not increase PPARγ expression or lipid accumulation typical of qHSCs. Diphosphoryl lipid A elicited the same effects as LPS on aHSCs indicating specificity, and monophosphoryl lipid A down-regulated fibrogenic markers but elicited very weak inflammatory response. LPS down-regulated the expression of cMyb, a transcription factor for αSMA, and up-regulated SMAD7 and C/EBPδ, the transcriptional inhibitors of Col1α1 expression. In vivo LPS treatment of aHSCs inhibited their proliferation, down-regulated PDGFβR, αSMA, TGFβR1, Col1α1 and cMyb expression, and increased expression of SMAD7, C/EBPα and C/EBPδ. In conclusion, LPS induces a unique phenotype in aHSCs associated with down-regulation of key fibrogenic mechanisms and thus may have an important role in limiting fibrosis.