Collagen‐I, which predominates in the neomatrix of fibrotic liver, regulates hepatocyte and hepatic stellate cell (HSC) phenotypes. Recovery from liver fibrosis is accompanied by hepatocyte regeneration, matrix degradation, and HSC apoptosis. Using mice bearing a mutated collagen‐I gene (r/r mice), which confers resistance to collagenase degradation, we have investigated the hypothesis that collagen‐I degradation is critical to HSC apoptosis and hepatocyte regeneration during recovery from liver fibrosis. During a 28‐day recovery period after 8 wk of CCl4 treatment, wild‐type (WT) livers had significantly (43%) decreased hydroxyproline (OHP) content. In r/r livers, however, OHP content remained elevated at peak fibrosis levels. Expressed markers of activated HSC (α‐smooth muscle actin, collagen‐I), elevated at peak fibrosis, dropped to control levels in WT livers after 28 days but remained raised in the r/r livers. Moreover, relative to WT livers, r/r livers had significantly reduced stellate cell apoptosis and hepatocyte regeneration during the recovery period. Using extracted collagen‐I from each genotype as culture substrata, relative to r/r, we show that WT collagen‐I promotes hepatocyte proliferation via stimulation of integrin αvβ₃. Failure to degrade collagen‐I critically impairs HSC apoptosis and may prevent the effective restoration of hepatocyte mass in liver fibrosis.