Bone marrow mesenchymal stromal cells (BMSCs) have a protective effect against liver cirrhosis. Long noncoding RNAs (lncRNAs) play crucial roles in the progression of liver cirrhosis. Therefore, it is aimed to clarify the lncRNA Kcnq1ot1 involved protective mechanism of BMSCs in liver cirrhosis. This study found that BMSCs treatment attenuates CCl4‐induced liver cirrhosis in mice. Additionally, the expression of lncRNA Kcnq1ot1 is upregulated in human and mouse liver cirrhosis tissues, in addition to TGF‐β1‐treated LX2 cells and JS1 cells. The expression of Kcnq1ot1 in liver cirrhosis is reversed with BMSCs treatment. The knockdown of Kcnq1ot1 alleviated liver cirrhosis both in vivo and in vitro. Fluorescence in situ hybridization (FISH) confirms that Kcnq1ot1 is mainly distributed in the cytoplasm of JS1 cells. It is predicted that miR‐374‐3p can directly bind with lncRNA Kcnq1ot1 and Fstl1, which is verified via luciferase activity assay. The inhibition of miR‐374‐3p or the overexpression of Fstl1 can attenuate the effect of Kcnq1ot1 knockdown. In addition, the transcription factor Creb3l1 is upregulated during JS1 cells activation. Moreover, Creb3l1 can directly bind to the Kcnq1ot1 promoter and positively regulate its transcription. In conclusion, BMSCs alleviate liver cirrhosis by modulating the Creb3l1/lncRNA Kcnq1ot1/miR‐374‐3p/Fstl1 signaling pathway.