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Background/aims: Epithelial-to-mesenchymal transition (EMT) plays a crucial role in hepatic fibrogenesis and liver repair in chronic liver disease. Our research highlights the antifibrotic potential of placenta-derived mesenchymal stem cells (PD-MSCs) and the role of phosphatase of regenerating liver-1 (PRL-1) in promoting liver regeneration., Methods: We evaluated the efficacy of PD-MSCs overexpressing PRL-1 (PD-MSCsPRL-1) in a bile duct ligation (BDL)-induced rat injury model, focusing on their ability to regulate EMT., Results: PD-MSCsPRL-1 significantly reduced mesenchymal markers by downregulating TGFB1/SMAD2, outperforming naïve PD-MSCs. The transplantation of PD-MSCsPRL-1 enhanced BMP7/SMAD1/5 expression, promoting epithelial marker expression and stimulating BMP7 within hepatocytes, modulating downstream SMAD signaling. Importantly, further validation confirmed that PRL-1 directly interacts with BMP7 in hepatocytes., Conclusions: PRL-1 expression in PD-MSCsPRL-1 restores TGFB1/BMP7 balance, promoting hepatic regeneration through mesenchymal-to-epithelial transition (MET). These findings highlight the therapeutic potential of engineered MSCs for liver disease and suggest innovative strategies for future stem cell therapies. more...