E2F transcription factor 1 (E2F1) is an important regulator of metabolic diseases; however, its role in liver function remains elusive. This study unraveled a regulatory cascade involving E2F1, early growth response‐1 (Egr‐1), nuclear receptor small heterodimer partner (SHP, NR0B2), and EIA‐like inhibitor of differentiation 1 (EID1) in cholestatic liver fibrosis. Liver E2F1 messenger RNA (mRNA) and protein expression was strongly up‐regulated in human nonalcoholic steatohepatitis (NASH) and alcohol cirrhosis; the latter was inversely correlated with diminished SHP expression. E2F1 was also highly induced by 3,5‐diethoxycarbonyl‐1, 4‐dihydrocollidine (DDC) feeding and bile‐duct ligation (BDL) in mice. E2F1^−/− mice exhibited reduced biliary fibrosis by DDC as determined by Masson Trichrome and Picro Sirius red staining, and decreased serum bile acid (BA), BA pool size, and fecal BA excretion. In addition, cholestatic liver fibrosis induced by BDL, as determined by immunohistochemistry analysis of a1 collagen expression, was increased in SHP^−/− mice but attenuated in hepatocyte SHP‐overexpressed transgenic (STG) mice. Egr‐1 exhibited marked induction in livers of SHP^−/− mice compared to the wild‐type mice in both sham and BDL groups, and reduction in STG livers. Egr‐1 promoter was activated by E2F1, and the activation was abrogated by expression of SHP and its co‐repressor EID1 in hepatoma cells Huh7, Hepa1, and stellate cells LX2. Chromatin immunoprecipitation assays further confirmed the association of E2F1, SHP, and EID1 proteins with the Egr‐1 promoter, and their direct protein interactions were determined by glutathione S‐transferase pull‐down assays. Interestingly, E2F1 activated Egr‐1 expression in a biphasic fashion as described in both human and mouse hepatocytes. Conclusion: E2F1 is a fibrogenic gene and could serve as a potential new diagnostic marker for nonalcoholic and alcoholic liver fibrosis/cirrhosis. (Hepatology 2014;60:919–930)