Fibrosis is a common pathological response to inflammation in many peripheral tissues and can prevent tissue regeneration and repair. Here, we identified persistent fibrotic scarring in the CNS following immune cell infiltration in the experimental autoimmune encephalomyelitis (EAE) mouse model of multiple sclerosis. Using lineage tracing and single-cell sequencing in EAE, we determined that the majority of the fibrotic scar is derived from proliferative CNS fibroblasts, not pericytes or infiltrating bone marrow-derived cells. Ablating proliferating fibrotic cells using cell-specific expression of herpes thymidine kinase led to an increase in oligodendrocyte lineage cells within the inflammatory lesions and a reduction in motor disability. We further identified that interferon-gamma pathway genes are enriched in CNS fibrotic cells, and the fibrotic cell-specific deletion of Ifngr1 resulted in reduced fibrotic scarring in EAE. These data delineate a framework for understanding the CNS fibrotic response.