The interplay between the inflammatory infiltrate and tissue resident cell populations invokes fibrogenesis. However, the temporal and mechanistic contributions of these cells to fibrosis are obscure. To address this issue, liver inflammation, ductular reaction (DR), and fibrosis were induced in C57BL/6 mice by thioacetamide administration for up to 12 weeks. Thioacetamide treatment induced two phases of liver fibrosis. A rapid pericentral inflammatory infiltrate enriched in F4/80⁺ monocytes co-localized with SMA⁺ myofibroblasts resulted in early collagen deposition, marking the start of an initial fibrotic phase (1 to 6 weeks). An expansion of bone marrow–derived macrophages preceded a second phase, characterized by accelerated progression of fibrosis (>6 weeks) after DR migration from the portal tracts to the centrilobular site of injury, in association with an increase in DR/macrophage interactions. Although chemokine (C-C motif) ligand 2 (CCL2) mRNA was induced rapidly in response to thioacetamide, CCL2 deficiency only partially abrogated fibrosis. In contrast, colony-stimulating factor 1 receptor blockade diminished C-C chemokine receptor type 2 [CCR2^neg (Ly6C^lo)] monocytes, attenuated the DR, and significantly reduced fibrosis, illustrating the critical role of colony-stimulating factor 1–dependent monocyte/macrophage differentiation and linking the two phases of injury. In response to liver injury, colony-stimulating factor 1 drives early monocyte-mediated myofibroblast activation and collagen deposition, subsequent macrophage differentiation, and their association with the advancing DR, the formation of fibrotic septa, and the progression of liver fibrosis to cirrhosis.