The hepatic stellate cell (HSC) is the primary cell responsible for the dramatic increase in the synthesis of type I collagen in the cirrhotic liver. Quiescent HSCs contain a low level of collagen alpha1(I) mRNA, while activated HSCs contain about 60- to 70-fold more of this mRNA. The transcription rate of the collagen alpha1(I) gene is only two fold higher in activated HSCs than in quiescent HSCs. In assays using actinomycin D or 5,6-dichlorobenzimidazole riboside collagen alpha1(I) mRNA has estimated half-lives of 1.5 h in quiescent HSCs and 24 h in activated HSCs. Thus, this 16-fold change in mRNA stability is primarily responsible for the increase in collagen alpha1(I) mRNA steady-state level in activated HSCs. We have identified a novel RNA-protein interaction targeted to the C-rich sequence in the collagen alpha1(I) mRNA 3' untranslated region (UTR). This sequence is localized 24 nucleotides 3' to the stop codon. In transient transfection experiments, mutation of this sequence diminished accumulation of an mRNA transcribed from a collagen alpha1(I) minigene and in stable transfections decreased the half-life of collagen alpha1(I) minigene mRNA. Binding to the collagen alpha1(I) 3' UTR is present in cytoplasmic extracts of activated but not quiescent HSCs. It contains as a subunit alphaCP, which is also found in the complex involved in stabilization of alpha-globin mRNA. The auxiliary factors necessary to promote binding of alphaCP to the collagen 3' UTR are distinct from the factors necessary for binding to the alpha-globin sequence. Since alphaCP is expressed in both quiescent and activated HSCs, these auxiliary factors are responsible for the differentially expressed RNA-protein interaction at the collagen alpha1(I) mRNA 3' UTR.