During chronic liver injury, transforming growth factor β (TGF-β) plays a prominent role in stimulating liver fibrogenesis by myofibroblast-like cells derived from hepatic stellate cells (HSCs). On the other hand, Smad 7 was recently shown to antagonize the TGF-β–induced activation of signal-transducing Smads (2 and 3). In this study, we investigated the regulatory mechanisms of the TGF-β signals in rat HSCs during acute liver injury and myofibroblasts (MFBs) during chronic liver injury, focusing on the roles of Smad 2 and antagonistic Smad 7. In acute liver injury, HSC-derived TGF-β increased plasminogen activator inhibitor type 1 (PAI-1) and α2(I) procollagen (COL1A2) transcripts. Smad 2 in HSCs during liver injury and primary cultured HSCs were activated by an autocrine mechanism, because high levels of Smad 2 phosphorylation and induction of PAI-1 transcript by TGF-β were observed in HSCs. Thereafter, Smad 7 induced by TGF-β negatively regulated the Smad 2 action. These results indicated that endogenous TGFβ–mediated Smad 7 in HSCs terminated the fibrotic signals mediated by signal-transducing Smads, and might be involved in the transient response to autocrine TGF-β signal after acute liver injury. By contrast, Smad 7 was not induced by the autocrine TGF-β signal, and constitutive Smad 2 activation was observed in MFBs throughout chronic liver injury, although Smad 7 could inhibit the TGF-β signal requiring Smad 2 phosphorylation by activated TGF-β receptor in cultured MFBs. This constitutive phosphorylation of Smad 2 by endogenous TGF-β under a low level of Smad 7 could be involved in the progression of liver fibrosis.