Fulminant hepatitis or acute liver failure (ALF), initiated by viral infection or hepatic toxin, is a devastating medical complication without effective therapeutic treatment. In this study, we addressed the potential roles of hepatic stellate cells (HSCs) and their produced matrix metalloproteinases (MMPs) in development of ALF. Mice were given lipopolysaccharide (LPS) and beta-galactosamine (GA) or carbon tetrachloride to create ALF and establish the association of IL-1, MMP-9, and caspase-3 in acute liver failure. In response to the hepatic toxin, IL-1 and MMP-9 were promptly induced within 1 hour, followed by caspase-3 activation at 2 hours, and dehiscence of sinusoids at 4 hours, and consequent lethality. In contrast, MMP-9 knockout mice were resistant to lethality and absent of caspase-3 activation, demonstrating an MMP-9-dependent activation of caspase in vivo. Further, IL-1-receptor knockout mice were resistant to lethality in MMP-9 dependent manner, indicating a causative relationship. Although many hepatic cells are capable to produce MMP-9 in vitro, HSCs were demonstrated here as the major hepatic cells to express MMP-9 in liver injury. To recapitulate the sinusoidal microenvironment we cultured primary HSCs in 3-dimensional ECM. In response to IL-1, massive MMP-9 was produced by the 3D culture concomitantly with degradation of type-IV collagen. Based on these evidences, we propose a novel model to highlight the initiation of acute liver failure: IL-1-induced MMPs by HSCs within the space of Disse and thereafter ECM degradation may provoke the collapse of sinusoids, leading parenchymal cell death and loss of liver functions.