During liver fibrosis hepatic stellate cells become activated, transforming into proliferative myofibroblastic cells expressing type I collagen and α-smooth muscle actin. They become the major producers of the fibrotic neomatrix in injured liver. This study examines if activated stellate cells are a committed phenotype, or whether they can become deactivated by extracellular matrix. Stellate cells isolated from normal rat liver proliferated and expressed mRNA for activation markers, α-smooth muscle actin, type I procollagen and tissue inhibitor of metalloproteinases-1 following 5–7 day culture on plastic, but culture on Matrigel suppressed proliferation and mRNA expression. Activated stellate cells were recovered from plastic by trypsinisation and replated onto plastic, type I collagen films or Matrigel. Cells replated on plastic and type I collagen films proliferated and remained morphologically myofibroblastic, expressing α-smooth muscle actin and type I procollagen. However, activated cells replated on Matrigel showed <30% of the proliferative rate of these cells, and this was associated with reduced cellular expression of proliferating cell nuclear antigen and phosphorylation of mitogen-activated protein kinase in response to serum. Activated HSC replated on Matrigel for 3–7 days progressively reduced their expression of mRNA for type I procollagen and α-smooth muscle actin and both became undetectable after 7 days. We conclude that basement membrane-like matrix induces deactivation of stellate cells. Deactivation represents an important potential mechanism mediating recovery from liver fibrosis in vivo where type I collagen is removed from the liver and stellate cells might re-acquire contact with their normal basement membrane-like pericellular matrix.