The renin-angiotensin system (RAS) plays a major role in liver fibrosis. Recently, a homolog of angiotensin-converting-enzyme 1 (ACE1), termed ACE2, has been identified that appears to be a negative regulator of the RAS by degrading Ang II to Ang1-7. The aim of this study was to characterize the long-term effects of gene deletion of ACE2 in the liver, to define the role of ACE2 in acute and chronic liver disease, and to characterize the role of Ang1-7 in hepatic stellate cell (HSC) activation. Ace2 knockout (KO) mice and wild-type (wt) littermates underwent different models of acute and chronic liver injury. Liver pathology was analyzed by histology, immunohistochemistry, alpha smooth muscle actin (α-SMA) immunoblotting, and quantitative polymerase chain reaction (qPCR). Murine HSCs were isolated by collagenase-pronase-perfusion, and density gradient centrifugation. One-year-old ace2 KO mice spontaneously developed an inflammatory cell infiltration and mild hepatic fibrosis that was prevented by treatment with irbesartan. Ace2 KO mice showed increased liver fibrosis following bile duct ligation for 21 days or chronic carbon tetrachloride (CCl4) treatment. In contrast, ace2 KO mice subjected to acute liver injury models did not differ from wt littermates. Treatment with recombinant ACE2 attenuated experimental fibrosis in the course of cholestatic and toxic liver injury. HSCs express the Ang1-7 receptor Mas and Ang1-7 inhibited Ang II-induced phosphorylation of extracellular signal-regulated kinase (ERK)-1/2 in cultured HSCs. Conclusion: ACE2 is a key negative regulator of the RAS and functions to limit fibrosis through the degradation of Ang II and the formation of Ang1-7. Whereas loss of ACE2 activity worsens liver fibrosis in chronic liver injury models, administration of recombinant ACE2 shows therapeutic potential. (HEPATOLOGY 2009.)