ABSTRACT: Liver fibrosis is a wound-healing response to chronic injuries, characterized by the excessive accumulation of extracellular matrix or scar tissue within the liver; in addition, its formation is associated with multiple cytokines as well as several cell types and a variety of signaling pathways. When liver fibrosis is not well controlled, it can progress to liver cirrhosis, but it is reversible in principle. Thus far, no efficient therapy is available for treatment of liver fibrosis. Although liver transplantation is the preferred strategy, there are many challenges remaining in this approach, such as shortage of donor organs, immunological rejection, and surgical complications. Hence, there is a great need for an alternative therapeutic strategy. Currently, mesenchymal stem cell (MSC) therapy is considered a promising therapeutic strategy for the treatment of liver fibrosis; advantageously, the characteristics of MSCs are continuous self-renewal, proliferation, multipotent differentiation, and immunomodulatory activities. The human umbilical cord-derived (hUC)-MSCs possess not only the common attributes of MSCs but also more stable biological characteristics, relatively easy accessibility, abundant source, and no ethical issues (e.g., bone marrow being the adult source), making hUC-MSCs a good choice for treatment of liver fibrosis. In this review, we summarize the biological characteristics of hUC-MSCs and their paracrine effects, exerted by secretion of various cytokines, which ultimately promote liver repair through several signaling pathways. Additionally, we discuss the capacity of hUC-MSCs to differentiate into hepatocyte-like cells for compensating the function of existing hepatocytes, which may aid in amelioration of liver fibrosis. Finally, we discuss the current status of the research field and its future prospects.