Hepatitis C virus (HCV)-specific immune effector responses can cause liver damage in chronic infection. Hepatic stellate cells (HSC) are the main effectors of liver fibrosis. TGFβ, produced by HCV-specific CD8+ T cells, is a key regulatory cytokine modulating HCV-specific effector T cells. Here we studied TGFβ as well as other factors produced by HCV-specific intrahepatic lymphocytes (IHL) and peripheral blood cells in hepatic inflammation and fibrogenesis. This was a cross-sectional study of two well-defined groups of HCV-infected subjects with slow (≤0.1 Metavir units/year, n = 13) or rapid (n = 6) liver fibrosis progression. HCV-specific T-cell responses were studied using interferon-gamma (IFNγ)-ELISpot ±monoclonal antibodies (mAbs) blocking regulatory cytokines, along with multiplex, enzyme-linked immunosorbent assay (ELISA) and multiparameter fluorescence-activated cell sorting (FACS). The effects of IHL stimulated with HCV-core peptides on HSC expression of profibrotic and fibrolytic genes were determined. Blocking regulatory cytokines significantly raised detection of HCV-specific effector (IFNγ) responses only in slow fibrosis progressors, both in the periphery (P = 0.003) and liver (P = 0.01). Regulatory cytokine blockade revealed HCV-specific IFNγ responses strongly correlated with HCV-specific TGFβ, measured before blockade (R = 0.84, P = 0.0003), with only a trend to correlation with HCV-specific IL-10. HCV-specific TGFβ was produced by CD8 and CD4 T cells. HCV-specific TGFβ, not interleukin (IL)-10, inversely correlated with liver inflammation (R = −0.63, P = 0.008) and, unexpectedly, fibrosis (R = −0.46, P = 0.05). In addition, supernatants from HCV-stimulated IHL of slow progressors specifically increased fibrolytic gene expression in HSC and treatment with anti-TGFβ mAb abrogated such expression. Conclusion: Although TGFβ is considered a major profibrogenic cytokine, local production of TGFβ by HCV-specific T cells appeared to have a protective role in HCV-infected liver, together with other T-cell-derived factors, ameliorating HCV liver disease progression. (HEPATOLOGY 2012;56:2094–2105)