Tissue fibrosis arises from a critical imbalance between the production and breakdown of extracellular matrix (ECM) components. Whereas current strategies predominantly focus on curbing ECM production, the possibility of promoting ECM degradation to resolve fibrosis remains largely untapped. The role of hepatic stellate cells (HSCs) in ECM degradation is an intriguing area for investigation. We previously demonstrated that inhibiting acid ceramidase (aCDase) increases ceramide in HSCs to ameliorate hepatic fibrosis. Here, we uncover a key signaling pathway that promotes ECM degradation in primary human HSCs, which is dependent upon the activation of protein kinase Cα (PKCα) and the induction of matrix metalloproteinase 1 (MMP-1) through extracellular signal–regulated kinase 1/2 (ERK1/2). Genetic reduction and pharmacological inhibition with a small molecule reduced aCDase activity, leading to increased collagen degradation and hepatic fibrosis resolution in the carbon tetrachloride (CCl4) and fructose, palmitate, cholesterol, and trans-fat (FPC) mouse models. Consistently, ceramide signaling correlated with ECM remodeling and degradation in patients with metabolic dysfunction–associated steatotic liver disease. The findings show that ceramide regulates ECM degradation and establish aCDase as a target for therapeutic regression of fibrosis.