Liver fibrosis is a complex inflammatory and fibrogenic process that results from chronic liver injury and represents an early step in the progression of cirrhosis. Several cell types [hepatic stellate cells (HSCs), hepatocytes, liver sinusoidal endothelial cells (LSECs), and Kupffer cells (KCs)], cytokines [platelet-derived growth factor (PDGF), transforming growth factor (TGF)-β, tumor necrosis factor (TNF)-α, interferons (IFNs), interleukins (ILs)], oxidative stress, and microRNAs (miRNAs) are involved in the initiation and progression of liver fibrosis/cirrhosis. Generally, liver fibrosis begins with the stimulation of inflammatory immune cells to secrete cytokines, growth factors, and other activator molecules. These chemical mediators direct HSCs to activate and synthesize large amounts of extracellular matrix (ECM) components. Therefore, HSC activation is a pivotal event in the development of fibrosis and a major contributor to collagen (specifically type I) accumulation. The inhibitory effect of halofuginone on collagen type α1(I) synthesis and ECM deposition has been shown in several experimental models of fibrotic diseases. Halofuginone inhibits TGF-β-induced phosphorylation of Smad3, which is a key phenomenon in the fibrogenesis. It also regulates cell growth and differentiation, apoptosis, cell migration, and immune cell function in liver fibrosis/cirrhosis. This review discusses the etiology and mechanisms of liver fibrosis/cirrhosis and the promising role of antifibrotic agent halofuginone.