Liver fibrosis is a common chronic liver disease, which is a stress response process of liver cells affected by one or more pathogenies for long term or repeatedly. During the fibrosis process, massive accumulated extracellular matrix can form scar tissue, which results in liver dysfunction or failure and seriously endangers the health of people. According to many independent reports, stem cell therapy can facilitate the alleviation of liver fibrosis. During the stem cell therapy, stem cells migrate to the injury site of liver and alleviate the liver fibrosis by improving the microenvironment of the scar area via paracrine way. This article reviews the formation, treatment, and stem cell therapy of liver fibrosis.