During liver fibrogenesis or long term culture, hepatic stellate cells (HSCs) evolved from “quiescent” to activated phenotype called “myofibroblast-like”, a transition prevented by retinoic acid (RA). Little is known about RA generation by HSCs. Our study aimed to check the ability of these cells to produce RA from retinol (Rol) and the alterations of this metabolic step by ethanol. To study this metabolic pathway, primary cultures of HSCs represent the most physiological model but technically suffer several drawbacks. To circumvent these problems, an immortalized rat HSC line (named PAV-1) has been established. We validated PAV-1 cell line as a convenient model to study retinoids metabolism by HSCs. Then, we showed that PAV-1 cells express Rol-binding proteins (RBPs), enzymes and nuclear receptors involved in RA signaling pathway. We also demonstrated in situ generation of functional all-trans-RA (ATRA), using transient transfections with a RA-sensitive reporter gene, in situ modulation of tissue transglutaminase (tTG) activity and HPLC experiments. This production was Rol dose-dependent; 4-methylpyrazole, citral, and ethanol-inhibited which argues in favor of an enzymatic process. In conclusion, we first demonstrate in situ RA generation from Rol in a newly immortalized rat HSC line, named PAV-1. Inhibition of RA production by ethanol in PAV-1 and recent data, suggesting fundamental role of RA to prevent fibrosis development in the liver, allow us to hypothesize that Rol metabolism could be a primary target for ethanol during development of hepatic fibrosis.