BACKGROUND: Fibroblast to myofibroblast conversion is a major driver of tissue remodeling in organ fibrosis. Distinct lineages of fibroblasts support homeostatic tissue niche functions, yet, their specific activation states and phenotypic trajectories during injury and repair have remained unclear. METHODS: We combined spatial transcriptomics, multiplexed immunostainings, longitudinal single-cell RNA-seq and genetic lineage tracing to study fibroblast fates during mouse lung regeneration. Our findings were validated in IPF patient tissues in situ as well as in cell differentiation and invasion assays using patient lung fibroblasts. Cell differentiation and invasion assays established a function of SFRP1 in regulating human lung fibroblast invasion in response to TGFβ1. MEASUREMENTS AND MAIN RESULTS: We discovered a transitional fibroblast state characterized by high Sfrp1 expression, derived from both Tcf21-Cre lineage positive and negative cells. Sfrp1+ cells appeared early after injury in peribronchiolar, adventitial and alveolar locations and preceded the emergence of myofibroblasts. We identified lineage specific paracrine signals and inferred converging transcriptional trajectories towards Sfrp1+ transitional fibroblasts and Cthrc1+ myofibroblasts. TGFβ1 downregulated SFRP1 in non-invasive transitional cells and induced their switch to an invasive CTHRC1+ myofibroblast identity. Finally, using loss of function studies we showed that SFRP1 modulates TGFβ1 induced fibroblast invasion and RHOA pathway activity. CONCLUSIONS: Our study reveals the convergence of spatially and transcriptionally distinct fibroblast lineages into transcriptionally uniform myofibroblasts and identifies SFRP1 as a modulator of TGFβ1 driven fibroblast phenotypes in fibrogenesis. These findings are relevant in the context of therapeutic interventions that aim at limiting or reversing fibroblast foci formation.