Hepatocyte growth factor (HGF) is a pleiotropic factor that plays an imperative role in tubular repair and regeneration after acute renal injury. Growing evidence indicates that HGF is also an endogenous renoprotective factor that possesses a potent antifibrotic ability. HGF prevents the initiation and progression of chronic renal fibrosis and inhibits transforming growth factor (TGF)-β₁ expression in a wide variety of animal models. In vitro, HGF counteracts the action of TGF-β₁ in different types of kidney cells, resulting in blockade of the myofibroblastic activation from interstitial fibroblasts and glomerular mesangial cells, as well as inhibition of the mesenchymal transition from tubular epithelial cells. Recent studies reveal that HGF antagonizes the profibrotic actions of TGF-β₁ by intercepting Smad signal transduction through diverse mechanisms. In interstitial fibroblasts, HGF blocks activated Smad-2/3 nuclear translocation, whereas it specifically upregulates the expression of the Smad transcriptional corepressor SnoN in tubular epithelial cells. In glomerular mesangial cells, HGF stabilizes another Smad corepressor, TGIF, by preventing it from degradation. Smad corepressors bind to activated Smad-2/3 and sequester their ability to transcriptionally activate TGF-β target genes. This article reviews recent advances in our understanding of the cellular and molecular mechanisms underlying HGF inhibition of renal fibrosis.