Liver fibrosis results from chronic damage to the liver in conjunction with various pathways and is mediated by a complex microenvironment. Based on clinical observations, it is now evident that fibrosis is a dynamic, bidirectional process with an inherent capacity for recovery and remodeling. The major mechanisms involved in liver fibrosis include the repetitive injury of hepatocytes, the activation of the inflammatory response after injury stimulation, and the activation and proliferation of hepatic stellate cells (HSCs), which represents the major extracellular matrix (ECM)-producing cells, stimulated by hepatocyte injury and inflammation. The microenvironment in the liver is synergistically regulated abnormal ECM deposition, scar formation, angiogenesis, and fibrogenesis. Moreover, recent studies have clarified novel mechanism in fibrosis such as epigenetic regulation of HSCs, the leptin and PPARγ pathways, the coagulation system, and even autophagy. Uncovering the mechanisms of liver fibrogenesis provides a basis to develop potential therapies to reverse and treat the fibrotic response, thereby improving the outcomes of patients with chronic liver disease. Although both scientific and clinical challenges remain, emerging studies attempt to reveal the ideal anti-fibrotic drug that could be easily delivered to the liver with high specificity and low toxicity. This review highlights the mechanisms, including novel pathways underlying fibrogenesis that may be translated into preventive and treatment strategies, reviews both current and novel agents that target specific pathways or multiple targets, and discusses novel drug delivery systems such as nanotechnology that can be applied in the treatment of liver fibrosis. In addition, we also discuss some current treatment strategies that are being applied in animal models and in clinical trials.