Activation of hepatic stellate cells (HSCs) is a pivotal event in liver fibrosis, characterized by dramatic disappearance of lipid droplets (LDs). Although LD disappearance has long been considered one of the hallmarks of HSC activation, the underlying molecular mechanisms are largely unknown. In this study, we sought to investigate the role of autophagy in the process of LD disappearance, and to further examine the underlying mechanisms in this molecular context. We found that LD disappearance during HSC activation was associated with a coordinate increase in autophagy. Inhibition or depletion of autophagy by Atg5 siRNA impaired LD disappearance of quiescent HSCs, and also restored lipocyte phenotype of activated HSCs. In contrast, induction of autophagy by Atg5 plasmid accelerated LD loss of quiescent HSCs. Importantly, our study also identified a crucial role for reactive oxygen species (ROS) in the facilitation of autophagy activation. Antioxidants, such as glutathione and N-acetyl cysteine, significantly abrogated ROS production, and in turn, prevented autophagosome generation and autophagic flux during HSC activation. Besides, we found that HSC activation triggered Rab25 overexpression, and promoted the combination of Rab25 and PI3KCIII, which direct autophagy to recognize, wrap and degrade LDs. Down-regulation of Rab25 activity, using Rab25 siRNA, blocked the target recognition of autophagy on LDs, and inhibited LD disappearance of quiescent HSCs. Moreover, the scavenging of excessive ROS could disrupt the interaction between autophagy and Rab25, and increase intracellular lipid content. Overall, these results provide novel implications to reveal the molecular mechanism of LD disappearance during HSC activation, and also identify ROS-Rab25-dependent autophagy as a potential target for the treatment of liver fibrosis.