Activation of hepatic stellate cells (HSCs) is crucial to the development of fibrosis in nonalcoholic fatty liver disease. Quiescent HSCs contain lipid droplets (LDs), whose depletion upon activation induces a fibrogenic gene program. Here we show that liver fatty acid-binding protein (L-Fabp), an abundant cytosolic protein that modulates fatty acid (FA) metabolism in enterocytes and hepatocytes, also modulates HSC FA utilization and in turn regulates the fibrogenic program. L-Fabp expression decreased 10-fold following HSC activation, concomitant with depletion of LDs. Primary HSCs isolated from L-FABP-/- mice contain fewer LDs than wild-type (WT) HSCs, and exhibit up-regulated expression of genes involved in HSC activation. Adenoviral L-Fabp transduction inhibited activation of passaged WT HSCs and increased both the expression of prolipogenic genes and also augmented intracellular lipid accumulation, including triglyceride and FA, predominantly palmitate. Freshly isolated HSCs from L-FABP-/- mice correspondingly exhibited decreased palmitate in the free FA pool. To investigate whether L-FABP deletion promotes HSC activation in vivo, we fed L-FABP-/- and WT mice a high-fat diet supplemented with trans-fatty acids and fructose (TFF). TFF-fed L-FABP-/- mice exhibited reduced hepatic steatosis along with decreased LD abundance and size compared to WT mice. In addition, TFF-fed L-FABP-/- mice exhibited decreased hepatic fibrosis, with reduced expression of fibrogenic genes, compared to WT mice. Conclusion: L-FABP deletion attenuates both diet-induced hepatic steatosis and fibrogenesis, despite the observation that L-Fabp paradoxically promotes FA and LD accumulation and inhibits HSC activation in vitro. These findings highlight the importance of cell-specific modulation of hepatic lipid metabolism in promoting fibrogenesis in nonalcoholic fatty liver disease.