The equilibrium between the production and degradation of collagen is rigorously controlled by a number of growth factors and cytokines. Interferon alfa (IFN-alpha) is now widely used for the treatment of chronic hepatitis C, which can improve serum levels of fibrotic markers and the degree of hepatic fibrosis, not only in patients who responded to therapy but also in those in whom it is ineffective. These findings may suggest that IFN-alpha possesses direct antifibrotic effects in addition to its antiviral activity. However, in contrast to IFN-gamma, which has been shown to suppress collagen gene transcription, little is known about the mechanisms responsible for the antifibrotic effects of IFN-alpha. Here, we report that IFN-alpha, when administered into transgenic mice harboring the alpha2(I) collagen gene (COL1A2) promoter sequence, significantly repressed promoter activation and prevented the progression of hepatic fibrosis induced by carbon tetrachloride injection. Transient transfection assays indicated that IFN-alpha decreased the steady-state levels of COL1A2 messenger RNA (mRNA) and inhibited basal and TGF-beta/Smad3-stimulated COL1A2 transcription in activated hepatic stellate cells (HSC). These inhibitory effects of IFN-alpha on COL1A2 transcription were exerted through the interaction between phosphorylated Stat1 and p300. Blocking of the IFN-alpha signal by overexpressing the intracellular domain-deleted IFN receptor increased basal COL1A2 transcription and abolished the inhibitory effects of IFN-alpha. In conclusion, our results indicate that IFN-alpha antagonizes the TGF-beta/Smad3-stimulated COL1A2 transcription in vitro and suppresses COL1A2 promoter activation in vivo, providing a molecular basis for antifibrotic effects of IFN-alpha.