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Expansion of biliary epithelial cells (BECs) during ductular reaction (DR) is observed in liver diseases including cystic fibrosis (CF), and associated with inflammation and fibrosis, albeit without complete understanding of underlying mechanism. Using two different genetic mouse knockouts of β-catenin, one with β-catenin loss is hepatocytes and BECs (KO1), and another with loss in only hepatocytes (KO2), we demonstrate disparate long-term repair after an initial injury by 2-week choline-deficient ethionine-supplemented diet. KO2 show gradual liver repopulation with BEC-derived β-catenin-positive hepatocytes and resolution of injury. KO1 showed persistent loss of β-catenin, NF-κB activation in BECs, progressive DR and fibrosis, reminiscent of CF histology. We identify interactions of β-catenin, NFκB, and CF transmembranous conductance regulator (CFTR) in BECs. Loss of CFTR or β-catenin led to NF-κB activation, DR, and inflammation. Thus, we report a novel β-catenin-NFκB-CFTR interactome in BECs, and its disruption may contribute to hepatic pathology of CF., eLife digest The liver has an incredible capacity to repair itself or ‘regenerate’ – that is, it has the ability to replace damaged tissue with new tissue. In order to do this, the organ relies on hepatocytes (the cells that form the liver) and bile duct cells (the cells that form the biliary ducts) dividing and transforming into each other to repair and replace damaged tissue, in case the insult is dire. During long-lasting or chronic liver injury, bile duct cells undergo a process called ‘ductular reaction’, which causes the cells to multiply and produce proteins that stimulate inflammation, and can lead to liver scarring (fibrosis). Ductular reaction is a hallmark of severe liver disease, and different diseases exhibit ductular reactions with distinct features. For example, in cystic fibrosis, a unique type of ductular reaction occurs at late stages, accompanied by both inflammation and fibrosis. Despite the role that ductular reaction plays in liver disease, it is not well understood how it works at the molecular level. Hu et al. set out to investigate how a protein called β-catenin – which can cause many types of cells to proliferate – is involved in ductular reaction. They used three types of mice for their experiments: wild-type mice, which were not genetically modified; and two strains of genetically modified mice. One of these mutant mice did not produce β-catenin in biliary duct cells, while the other lacked β-catenin both in biliary duct cells and in hepatocytes. After a short liver injury – which Hu et al. caused by feeding the mice a specific diet – the wild-type mice were able to regenerate and repair the liver without exhibiting any ductular reaction. The mutant mice that lacked β-catenin in hepatocytes showed a temporary ductular reaction, and ultimately repaired their livers by turning bile duct cells into hepatocytes. On the other hand, the mutant mice lacking β-catenin in both hepatocytes and bile duct cells displayed sustained ductular reactions, inflammation and fibrosis, which looked like that seen in patients with liver disease associated to cystic fibrosis. Further probing showed that β-catenin interacts with a protein called CTFR, which is involved in cystic fibrosis. When bile duct cells lack either of these proteins, another protein called NF-B gets activated, which causes the ductular reaction, leading to inflammation and fibrosis. The findings of Hu et al. shed light on the role of β-catenin in ductular reaction. Further, the results show a previously unknown interaction between β-catenin, CTFR and NF-B, which could lead to better treatments for cystic fibrosis in the future.