Genesis of myofibroblasts is obligatory for the development of pathology in many adult lung diseases. Adult lung tissue contains a population of perivascular ABCG2^pos mesenchymal stem cells (MSC) that are precursors of myofibroblasts and distinct from NG2 pericytes. We hypothesized that these MSC participate in deleterious remodeling associated with pulmonary fibrosis (PF) and associated hypertension (PH). To test this hypothesis, resident lung MSC were quantified in lung samples from control subjects and PF patients. ABCG2^pos cell numbers were decreased in human PF and interstitial lung disease compared with control samples. Genetic labeling of lung MSC in mice enabled determination of terminal lineage and localization of ABCG2 cells following intratracheal administration of bleomycin to elicit fibrotic lung injury. Fourteen days following bleomycin injury enhanced green fluorescent protein (eGFP)-labeled lung MSC-derived cells were increased in number and localized to interstitial areas of fibrotic and microvessel remodeling. Finally, gene expression analysis was evaluated to define the response of MSC to bleomycin injury in vivo using ABCG2^pos MSC isolated during the inflammatory phase postinjury and in vitro bleomycin or transforming growth factor-β1 (TGF-β1)-treated cells. MSC responded to bleomycin treatment in vivo with a profibrotic gene program that was not recapitulated in vitro with bleomycin treatment. However, TGF-β1 treatment induced the appearance of a profibrotic myofibroblast phenotype in vitro. Additionally, when exposed to the profibrotic stimulus, TGF-β1, ABCG2, and NG2 pericytes demonstrated distinct responses. Our data highlight ABCG2^pos lung MSC as a novel cell population that contributes to detrimental myofibroblast-mediated remodeling during PF.