The role of circular RNA (circRNA) in radiation‐induced liver disease (RILD) remains largely unknown. In this study, Ras‐related C3 botulinum toxin substrate 1 (RAC1) was elevated in irradiated human hepatic stellate cell (HSC) line LX2, the important effector cell mediating RILD. Overexpression of RAC1 promotes cell proliferation, proinflammatory cytokines production, and α‐smooth muscle actin expression, which were blocked by microRNA (miR)‐146a‐5p mimics. CircRNA RSF1 (circRSF1) was upregulated in irradiated LX2 cells and predicted to harbor binding site for miR‐146a‐5p. Biotinylated‐RNA pull down and dual‐luciferase reporter detection confirmed the direct interaction of circRSF1 and miR‐146a‐5p. Enforced expression of circRSF1 increased RAC1 expression by acting as miR‐146a‐5p sponge to inhibit miR‐146a‐5p activity, and thus enhanced the cell viability, and promoted inflammatory and fibrotic phenotype of irradiated LX2 cells. These findings indicate a functional regulatory axis composing of circRSF1, miR‐146a‐5p, and RAC1 in irradiated HSC, which may provide attractive therapeutic targets for RILD.