Regardless of etiology, all patients with chronic renal disease show a progressive decline in renal function with time. Fibrosis, so-called scarring, is a key cause of this pathophysiology. Fibrosis involves an excess accumulation of extracellular matrix (primarily composed of collagen) and usually results in loss of function when normal tissue is replaced with scar tissue. While recent major advances have led to a much better understanding of this process, many problems remain. We for instance know little about why some wounds heal and others scar, and little about how many putative anti-fibrotic agents work. This review discusses recent advances in our understanding of the mechanisms of tubulointerstitial fibrosis, focusing on the regulation and role of the myofibroblast in this process, the role of recently recognised endogenous anti-fibrotic factors, controversy surrounding the effects of metalloproteinases, and the opportunities presented by new treatment strategies that abrogate and may even reverse fibrosis.