A consistent feature of chronic liver diseases and the hallmark of pathologic repair is the so-called "ductular reaction." This is a histologic abnormality characterized by an expansion of dysmorphic cholangiocytes inside and around portal spaces infiltrated by inflammatory, mesenchymal, and vascular cells. The ductular reaction is a highly regulated response based on the reactivation of morphogenetic signaling mechanisms and a complex crosstalk among a multitude of cell types. The nature and mechanism of these exchanges determine the difference between healthy regenerative liver repair and pathologic repair. An orchestrated signaling among cell types directs mesenchymal cells to deposit a specific extracellular matrix with distinct physical and biochemical properties defined as portal fibrosis. Progression of fibrosis leads to vast architectural and vascular changes known as "liver cirrhosis." The signals regulating the ecology of this microenvironment are just beginning to be addressed. Contrary to the tumor microenvironment, immune modulation inside this "benign" microenvironment is scarcely known. One of the reasons for this is that both the ductular reaction and portal fibrosis have been primarily considered a manifestation of cholestatic liver disease, whereas this phenomenon is also present, albeit with distinctive features, in all chronic human liver diseases. Novel human-derived cellular models and progress in "omics" technologies are increasing our knowledge at a fast pace. Most importantly, this knowledge is on the edge of generating new diagnostic and therapeutic advances. Here, we will critically review the latest advances, in terms of mechanisms, pathophysiology, and treatment prospects. In addition, we will delineate future avenues of research, including innovative translational opportunities.