Pulmonary fibrosis is a progressive lung disorder. Evidence has shown that hsa_circular (circ)RNA_0001861 is dysregulated in pulmonary fibrosis. However, the detailed function of hsa_circRNA_0001861 in pulmonary fibrosis remains unexplored. To investigate the function of hsa_circRNA_0001861 in pulmonary fibrosis, human pulmonary fibroblasts in vitro were used, and cell counting kit-8 (CCK-8) and 5-ethynyl-2'-deoxyuridine (EdU) staining were performed to assess cell viability and proliferation, respectively. Western blot analysis and reverse transcription-quantitative PCR (RT-qPCR) were used to evaluate protein and mRNA levels. Meanwhile, the relationship among hsa_circRNA_0001861, miR-296-5p and BCL-2 binding component 3 (BBC3) was investigated by RNA pull-down assays. Furthermore, an in vivo model of lung fibrosis was constructed to assess the function of hsa_circRNA_0001861 in lung fibrosis. The data revealed that TGF‑β1 significantly increased the proliferation of pulmonary fibroblasts, while this phenomenon was markedly abolished by hsa_circRNA_0001861 overexpression. hsa_circRNA_0001861 overexpression markedly inhibited TGF‑β1‑induced fibrosis in pulmonary fibroblasts through the mediation of α-smooth muscle actin, E-cadherin, collagen III and fibronectin 1. Meanwhile, hsa_circRNA_0001861 could bind with miR-296-5p, and BBC3 was identified to be the downstream mRNA of miR-296-5p. In addition, the upregulation of hsa_circRNA_0001861 clearly reversed TGF‑β1‑induced fibrosis and proliferation in pulmonary fibroblasts through the upregulation of BBC3. Furthermore, hsa_circRNA_0001861 upregulation markedly alleviated pulmonary fibrosis in vivo. Hsa_circRNA_0001861 upregulation attenuated pulmonary fibrosis by modulating the miR-296-5p/BBC3 axis. Hence, the present study may provide some insights for the discovery of new methods against pulmonary fibrosis.