Cholestasis is a condition that leads to chronic hepatobiliary inflammation, fibrosis, and eventually cirrhosis. Many microRNAs (miRs) are known to have a role in fibrosis progression; however, the role of miR-21 during cholestasis remains unknown. Therefore, the aim of this study was to elucidate the role of miR-21 during cholestasis-induced biliary hyperplasia and hepatic fibrosis. Wild-type (WT) and miR-21-/- mice underwent Sham or bile duct ligation (BDL) for 1 week, before evaluating liver histology, biliary proliferation, hepatic stellate cell (HSC) activation, fibrotic response, and small mothers against decapentaplegic 7 (Smad-7) expression. In vitro, immortalized murine biliary cell lines (IMCLs) and human hepatic stellate cell line (hHSC) were treated with either miR-21 inhibitor or control before analyzing proliferation, apoptosis, and fibrotic responses. In vivo, the levels of miR-21 were increased in total liver and cholangiocytes after BDL, and loss of miR-21 decreased the amount of BDL-induced biliary proliferation and intrahepatic biliary mass. In addition, loss of miR-21 decreased BDL-induced HSC activation, collagen deposition, and expression of the fibrotic markers transforming growth factor-β1 and α-smooth muscle actin. In vitro, IMCL and hHSCs treated with miR-21 inhibitor displayed decreased proliferation and expression of fibrotic markers and enhanced apoptosis when compared with control treated cells. Furthermore, mice lacking miR-21 show increased Smad-7 expression, which may be driving the decrease in biliary hyperplasia and hepatic fibrosis. During cholestatic injury, miR-21 is increased and leads to increased biliary proliferation and hepatic fibrosis. Local modulation of miR-21 may be a therapeutic option for patients with cholestasis.