Kupffer cells (KC) play a central role in the initiation and perpetuation of hepatic inflammation, which, if uncontrolled, can result in tissue damage, fibrosis, and cirrhosis. Interleukin-10 (IL-10) can inhibit a range of macrophage functions. We hypothesized that the transcription, synthesis, and release of IL-10 may influence the development of liver injury. Rat KC were activated in vitro with lipopolysaccharide (LPS), and expression of IL-10 mRNA compared with IL-13 and IL-1β by reverse-transcription polymerase chain reaction (RT-PCR). The effects of pretreatment with recombinant IL-10 (rIL-10) on KC phagocytosis, production of superoxide (SO), and tumor necrosis factor α (TNF-α) were examined by fluorescent activated cell sorter (FACS), reduction of ferricytochrome C, and bioassay, respectively. Rats were administered intraperitoneal carbon tetrachloride (CCl4), and expression of IL-10 mRNA and protein in vivo compared with IL-13 and IL-1β by RT-PCR and immunoblotting. Results were correlated with histological inflammatory changes. Finally, IL-10 gene-deleted (IL-10−/−) mice and wild-type (WT) controls were administered intraperitoneal CCl4 biweekly for up to 70 days, and the development of inflammation and fibrosis compared by scoring histological changes. IL-10 mRNA was up-regulated early, both in KC in vitro and in whole liver in vivo, concurrent with that of IL-1β. IL-10 was able to inhibit KC production of both SO and TNF-α in vitro, and this was achieved more effectively than IL-4 or IL-13; no such effects were seen on KC phagocytosis. After 70 days of treatment with CCl4, IL-10−/− mice showed significantly more severe fibrosis and exhibited higher hepatic TNF-α levels than WT controls. These results suggest that IL-10 synthesized during the course of liver inflammation and fibrosis may modulate KC actions, and influence subsequent progression of fibrosis.