Hepatic stellate cells (HSCs) are important part of the local ‘stem cell niche’ for hepatic progenitor cells (HPCs) and hepatocytes. However, it is unclear as to whether the products of activated HSCs are required to attenuate hepatocyte injury, enhance liver regeneration, or both. In this study, we performed ‘loss of function’ studies by depleting activated HSCs with gliotoxin. It was demonstrated that a significantly severe liver damage and declined survival rate were correlated with depletion of activated HSCs. Furthermore, diminishing HSC activation resulted in a 3-fold increase in hepatocyte apoptosis and a 66% decrease in the number of proliferating hepatocytes. This was accompanied by a dramatic decrease in the expression levels of five genes known to be up-regulated during hepatocyte replication. In particular, it was found that depletion of activated HSCs inhibited oval cell reaction that was confirmed by decreased numbers of Pank-positive cells around the portal tracts and lowered gene expression level of cytokeratin 19 (CK19) in gliotoxin-treated liver. These data provide clear evidence that the activated HSCs are involved in both hepatocyte death and proliferation of hepatocytes and HPCs in acetaminophen (APAP)-induced acute liver injury.