Transdifferentiation of hepatic stellate cells (HSC) constitutes a major cellular event in the genesis of alcoholic liver fibrosis and cirrhosis and molecular mechanisms underlying this process is incompletely understood. Our laboratory proposed several years ago that HSC quiescence requires the transcriptional program known to be integral to preadipocyte to adipocyte differentiation. In support of the hypothesis, our research demonstrates the expression of adipogenic transcription factors (C/EBPs, PPARgamma, SREBP-1c, LXRalpha) and adipocyte-specific genes (adipsin, resistin) are high in quiescent HSC and depleted in activated HSC. Three gain-of-function approaches have been taken to test this notion: the treatment of activated HSC with the adipocyte differentiation cocktail; ectopic expression of PPARgamma or SREBP-1c. All three treatments coordinately upregulate a panel of putative adipogenic transcription factors and cause morphologic and biochemical reversal of activated HSC to quiescent cells. These findings establish a new conceptual framework for the treatment of liver fibrosis and propose an intriguing notion concerning the plasticity of HSC.