The effect of human umbilical cord mesenchymal stem cells (hUC-MSCs) on the proliferation of hepatic stellate cells (HSCs) is largely unknown. The purpose of this study was to explore the mechanism of action of hUC‑MSCs on the proliferation of HSCs in vitro. The upper and lower double-cell co-culture system was established between hUC‑MSCs and HSCs in the experimental group. HSCs were cultured alone as a negative control group. Cell proliferation and apoptosis were determined by 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide (MTT) assay and flow cytometry, respectively. Cell supernatants were harvested to determine the concentration of transforming growth factor-β1 (TGF-β1) by ELISA. mRNA and protein of TGF-β1, Smad3 and Smad7 in HSCs were determined by reverse transcription-polymerase chain reaction and western blotting, respectively. In the co-culture group, the proliferation of HSCs was significantly inhibited compared with the negative control group at 24 and 48 h (p<0.05). Apoptosis of HSCs in the co-culture group increased compared with that in the negative control group, which was more obvious at 48 h (p<0.05). The concentration of TGF-β1 in the co-culture group was significantly lower than in the HSCs cultured alone (p<0.05). After HSCs were co-cultured with hUC‑MSCs for 48 h, expression of TGF-β1 and Smad3 mRNA and protein was reduced and expression of Smad7 mRNA and protein was increased compared with the negative control group (p<0.05). hUC‑MSCs inhibited proliferation of HSCs, possibly through inhibiting TGF-β1 and Smad3 expression and increasing Smad7 protein expression.