Hepatocellular carcinomas (HCCs) mainly develop from liver cirrhosis and severe liver fibrosis that are established with long-lasting inflammation of the liver. Silencing of the suppressor of the cytokine signaling-1 (SOCS1) gene, a negative regulator of cytokine signaling, by DNA methylation has been implicated in development or progress of HCC. However, how SOCS1 contributes to HCC is unknown. We examined SOCS1 gene methylation in >200 patients with chronic liver disease and found that the severity of liver fibrosis is strongly correlated with SOCS1 gene methylation. In murine liver fibrosis models using dimethylnitrosamine, mice with haploinsufficiency of the SOCS1 gene (SOCS1^−/+ mice) developed more severe liver fibrosis than did wild-type littermates (SOCS1^+/+ mice). Moreover, carcinogen-induced HCC development was also enhanced by heterozygous deletion of the SOCS1 gene. These findings suggest that SOCS1 contributes to protection against hepatic injury and fibrosis, and may also protect against hepatocarcinogenesis.