Fibrosis results from inflammatory tissue damage and impaired regeneration. In the context of bleomycin-induced pulmonary fibrosis, we demonstrated that the matricellular protein termed secreted protein acidic and rich in cysteine (SPARC) distinctly regulates inflammation and collagen deposition, depending on its cellular origin. Reciprocal Sparc(-/-) and wild-type (WT) bone marrow chimeras revealed that SPARC expression in host fibroblasts is required and sufficient to induce collagen fibrosis in a proper inflammatory environment. Accordingly, Sparc(-/-) >WT chimeras showed exacerbated inflammation and fibrosis due to the inability of Sparc(-/-) macrophages to down-regulate tumor necrosis factor production because of impaired responses to tumor growth factor-β. Hence, the use of bone marrow cells expressing a dominant-negative form of tumor growth factor-β receptor type II under the monocyte-specific CD68 promoter, as a decoy, phenocopied Sparc(-/-) donor chimeras. Our results point to an unexpected dual role of SPARC in oppositely influencing the outcome of fibrosis.