Chronic HCV infection affects an estimated 3% of the world’s population (>180 million people) and is a worldwide health problem causing end-stage liver diseases including hepatocellular carcinoma (HCC). The development of HCV-related HCC occurs by advanced fibrosis or cirrhosis. The clinical outcome of HCV infection and HCC risk depends on a balance between pro- and anti-inflammatory cytokines and the severity of liver inflammation. Our preliminary data show that exosomes released from HCV-infected hepatocytes contain the immunoregulatory molecules such as TGF-β. Importantly, HCV exosmes derived from infected hepatocytes promote intercellular communication with non-parenchymal cells such as Mφ and LSEC. As a result of receiving signaling from HCV exosomes, Mφ and LSEC are differentiated into fibrotic cells, that activate stellate cells and induce the development of liver fibrosis. The overall goal of this project is to define the mechanism by which HCV-derived exosomes from infected hepatocytes drive pro-fibrotic liver microenvironment and explore potential therapeutic agents to prevent liver fibrosis. In Aim 1, we propose to identify key molecular machinery required for the secretion of hepatocyte exosomes after HCV infection in in vitro and in vivo. In Aim 2, we will determine how HCV-derived exosomes induce the activation of fibrotic M2-like Mφ. In Aim 3, we will determine how HCV-derived exosomes induce fibrotic LSEC differentiation and explore a therapeutic strategy for preventing fibrosis. The studies proposed here will break new ground for identifying factors crucial for driving pro-fibrotic liver microenvironment and will help to develop novel therapeutic targets for the prevention of liver fibrosis.