Hepatic stellate cells (HSCs) are key drivers of local fibrosis. Adiponectin, conventionally thought of as an adipokine, is also expressed in quiescent HSCs. However, the impact of its local expression on the progression of liver fibrosis remains unclear. We recently generated a transgenic mouse line (Lrat-rtTA) that expresses the doxycycline-responsive transcriptional activator rtTA under the control of the HSC-specific lecithin retinol acyltransferase (Lrat) promoter, which enables us to specifically and inducibly overexpress or eliminate genes in these cells. The inducible elimination of HSCs protects mice from methionine/choline-deficient (MCD) diet-induced liver fibrosis, confirming their causal involvement in fibrosis development. We generated HSC-specific adiponectin overexpression and null models that demonstrate that HSC-specific adiponectin overexpression dramatically reduces liver fibrosis, whereas HSC-specific adiponectin elimination accelerates fibrosis progression. We identify a local adiponectin-peroxisome proliferator-activated receptor gamma (PPARγ) axis in HSCs that exerts a marked influence on the progression of local fibrosis, independent of circulating adiponectin derived from adipocytes.