Transforming growth factor (TGF-β) induced activation of portal fibroblast cells serves as a primary cause for liver fibrosis following cholestatic injury. The underlying epigenetic mechanism is not clear. We studied the role of a transcriptional modulator, megakaryoblastic leukemia 1 (MKL1) in this process. We report here that MKL1 deficiency ameliorated BDL-induced liver fibrosis in mice as assessed by histological stainings and expression levels of pro-fibrogenic genes. MKL1 silencing by small interfering RNA (siRNA) abrogated TGF-β induced transactivation of pro-fibrogenic genes in portal fibroblast cells. TGF-β stimulated the binding of MKL1 on the promoters of pro-fibrogenic genes and promoted the interaction between MKL1 and SMAD3. While SMAD3 was necessary for MKL1 occupancy on the gene promoters, MKL1 depletion impaired SMAD3 binding reciprocally. TGF-β treatment induced the accumulation of trimethylated histone H3K4 on the gene promoters by recruiting a methyltransferase complex. Knockdown of individual members of this complex significantly weakened the binding of SMAD3 and down-regulated the activation of portal fibroblast cells. In conclusion, we have identified an epigenetic pathway that dictates TGF-β induced pro-fibrogenic transcription in portal fibroblast thereby providing novel insights for the development of therapeutic solutions to treat liver fibrosis.