Liver fibrosis is mediated by the transformation of hepatic stellate cells (HSC) from a quiescent to an activated state To understand the role of HSC in liver immunity, we investigated the effect of this transition on T cell stimulation in vitro Unlike quiescent HSC, activated HSC did not induce proliferation of antigen-specific T cells Phenotypic analysis of quiescent and activated HSC revealed that activated HSC expressed the coinhibitory molecule B7-H4 Silencing B7-H4 by small interfering RNA (siRNA) in activated HSC restored the ability of T cells to proliferate, differentiate, and regain effector recall responses Furthermore, expression of B7-H4 on HSC inhibits early T cell activation and addition of exogenous interleukin (IL)-2 reversed the T cell anergy induced by activated HSC Conclusion These studies reveal a novel role for activated HSC in the attenuation of intrahepatic T cell responses by way of expression of the coinhibitory molecule B7-H4, and may provide fundamental insight into intrahepatic immunity during liver fibrogenesis (HEPATOLOGY 2010,52 2177-2185)