Differentiation of hepatic stellate cells (HSCs) to extracellular matrix– and growth factor–producing cells supports liver regeneration through promotion of hepatocyte proliferation. We show that the neurotrophin receptor p75^NTR, a tumor necrosis factor receptor superfamily member expressed in HSCs after fibrotic and cirrhotic liver injury in humans, is a regulator of liver repair. In mice, depletion of p75^NTR exacerbated liver pathology and inhibited hepatocyte proliferation in vivo. p75^NTR–/– HSCs failed to differentiate to myofibroblasts and did not support hepatocyte proliferation. Moreover, inhibition of p75^NTR signaling to the small guanosine triphosphatase Rho resulted in impaired HSC differentiation. Our results identify signaling from p75^NTR to Rho as a mechanism for the regulation of HSC differentiation to regeneration-promoting cells that support hepatocyte proliferation in the diseased liver.