Induction or overexpression of the heme‐degrading enzyme, heme oxygenase 1 (HO‐1), has been shown to protect mice from liver damage induced by acute inflammation. We have investigated the effects of HO‐1 induction in a mouse model of chronic liver inflammation and fibrogenesis with progression to hepatocellular carcinoma (HCC) (Mdr2ko; FVB.129P2‐Abcb4^tm1Bor). HO‐1 was induced in vivo by treatment with cobalt protoporphyrin IX, starting at week 5 or 12 of mice lifespan, and continued for 7 weeks. Our results showed that HO‐1 induction reduced liver damage and chronic inflammation by regulating immune cell infiltration or proliferation as well as tumor necrosis factor receptor signaling. Fibrosis progression was significantly reduced by HO‐1 induction in mice with mild, as well as established, portal and lobular fibrosis. HO‐1 induction significantly suppressed hepatic stellate cell activation. During established fibrosis, HO‐1 induction was able to revert portal inflammation and fibrosis below levels observed at the start of treatment. Moreover, hepatocellular proliferation and signs of dysplasia were decreased after HO‐1 induction. Conclusion: Induction of HO‐1 interferes with chronic inflammation and fibrogenesis and, in consequence, might delay progression to HCC. (HEPATOLOGY 2012;)