Orthovanadate (OV), an inhibitor of protein tyrosine phosphatases, affects various biological processes in a cell-type-specific manner. In this study, we investigated the effect of OV on hepatic stellate cells (HSCs). When primary rat HSCs were cultured in the presence of 10% serum, they spontaneously lost characteristic stellate morphology, proliferated, and were transformed into an activated state with the formation of abundant stress fibers and increased expression of both alpha-smooth muscle actin and collagen type I mRNA. OV treatment inhibited proliferation and activation of HSCs and partially reversed the phenotype of activated HSCs. Among the signaling molecules investigated, phosphorylation of the Src protein at tyrosine 416 was the most striking in OV-treated HSCs. Treatment of cells with Src family inhibitors partially abrogated the effects of OV. Furthermore, transfection of v-Src into activated HSCs induced a stellate morphology similar to that in the quiescent state. We then examined whether OV could effectively suppress HSC activation in vivo after liver injury induced by either carbon tetrachloride or dimethylnitrosamine. OV significantly reduced the appearance of alpha-smooth muscle actin-positive cells and decreased collagen deposition, concomitant with an improvement in liver function. Our study showed for the first time that OV was able to suppress the activation of HSCs, possibly through the modulation of Src activity, and attenuated fibrosis after chronic liver injury.