Residing in the space of Disse within loose extracellular matrix (ECM) resembling that in basement membranes, the hepatic stellate cells (HSC) remain in quiescence as vitamin A storage cells. In response to liver injury HSC undergo morphologic and functional trans-differentiation, converting from vitamin A-storing, star-like cells into contractile myofibroblastic cells, a process called activation. Accompanying cellular activation, the ECM components in the space of Disse switch from matrices rich in type-IV collagen and laminin, into condensed interstitial ECM, indicating that proteolytic degradation may occur to change the microenvironment in sinusoids as well as the fate of HSC. Indeed, matrix metalloproteinases (MMP), a family of ECM degradative enzymes, are promptly expressed by HSC in response to diverse hepatic toxins. In vitro experiments also demonstrated the role of MMP in activation of HSC cultured in 3-D ECM. Conversely, MMP may also contribute to regression of liver fibrosis through cleavage of the fibrillar ECM and promotion of apoptosis among the activated HSC. Thus, MMP play dual roles both bad and good in liver fibrosis, depending on the timing.