During lung fibrosis, the epithelium induces signaling to underlying mesenchyme to generate excess myofibroblasts and extracellular matrix; herein, we focus on signaling in the mesenchyme. Our studies indicate that platelet-derived growth factor receptor (PDGFR)-β cells are the predominant source of myofibroblasts and Kruppel-like factor (KLF) 4 is upregulated in PDGFR-β cells, inducing TGFβ pathway signaling and fibrosis. In fibrotic lung patches, KLF4 is down-regulated, suggesting KLF4 levels decrease as PDGFR-β cells transition into myofibroblasts. In contrast to PDGFR-β cells, KLF4 reduction in α-smooth muscle actin (SMA) cells non-cell autonomously exacerbates lung fibrosis by inducing macrophage accumulation and pro-fibrotic effects of PDGFR-β cells via a Forkhead box M1 to C-C chemokine ligand 2-receptor 2 pathway. Taken together, in the context of lung fibrosis, our results indicate that KLF4 plays opposing roles in PDGFR-β cells and SMA cells and highlight the importance of further studies of interactions between distinct mesenchymal cell types.