Ductular reaction (DR) is characterized by the proliferation of reactive bile ducts induced by liver injuries. DR is pathologically recognized as bile duct hyperplasia and is commonly observed in biliary disorders. It can also be identified in various liver disorders including nonalcoholic fatty liver disease. DR is associated with liver fibrosis and damage, and the extent of DR parallels to patient mortality. DR raises scientific interests because it is associated with transdifferentiation of liver cells and may play an important role in hepatic regeneration. The origin of active cells during DR can be cholangiocytes, hepatocytes, or hepatic progenitor cells, and associated signaling pathways could differ depending on the specific liver injury or animal models used in the study. Although further studies are needed to elucidate detailed mechanisms and the functional roles in liver diseases, DR can be a therapeutic target to inhibit liver fibrosis and to promote liver regeneration. This review summarizes previous studies of DR identified in patients and animal models as well as currently understood mechanisms of DR.