Objective To study the anti-fibrotic and anti-injurious activities of TCM and autologous bone marrow stem cells transplantation. Methods Acute localized liver injury model was induced in rabbits by injecting ethanol locally, and the liver fibrosis models were reproduced by complex factors (high lipid, low protein, alcohol, CCl₄). Liver function was assessed by measurement ALT, AST, TP, ALB, and GST. The necrotic areas were measured by pathological analytic system, and the concentrations of serum of PC III , HA in serum were measured by radioimmunoassay. Histopathological changes and degrees of fibrosis, hydroxyproline content in the hepatic tissues were assessed also. /mPA, CK-18, and BrdU - labeled transplanted cells were determined by immunohistochemical staining. Results In the acute liver injury experiment, the reduction of serum GST levels was remarkable in all treated groups, compared with the model group (P＜0.05 ). The necrotic regions of the treated groups decrease significantly, compared to model group ( P＜0.01). In the inflammatory regions of transplanted rabbits many Brdu-labeled cells were easily observed, most transplanted cells were predominantly in clusters of 1～3 cells each. Part of the cells exhibit the morphology of hepatocyte or bile duct epithelial cells. During liver fibrous experiment, the serum ALT and AST values were reduced significantly in the treated rats (P＜0.01), serum TP, ALB, A/G levels were increased in all animals receiving treatment (P＜0.01 or 0.05), the serum PC ID , HA levels were also reduced remarkably (P＜0.01). Determination of tissue hydroxyproline content confirmed the histological studies, showing a net reduction in total collagen levels. The normal liver tissues showed very weak /xPA expression, and Guiyuan Fang caused a marked increase of /uPA expression in the livers in a dose-dependent manner. The fiPA expression in the autologous BMSCs transplantation group and Guiyuan Fang plus autologous BMSCs transplantation group were the strongest. Double immunohistochemical staining showed the BrdU-labeled cells were fully integrated in the liver parenchyma, along with expression of cytokeratin-18，the liver epithelial specific marker. Some BMSCs have differentiated into hepatocytes or endothelial cells. Conclusion The bone marrow stem cells survive, proliferate, and differentiate in the fibrotic and injurious environment. TCM synergize with bone marrow stem cells to improve liver function, to protect hepatocytes from toxicant, to promote protein synthesis, and to provide a good environment for hepatocyte function. These findings establish the basis for further analysis of BMSCs transplantation in acute and chronic liver diseases.