Understanding the origin of myofibroblasts in kidney is of great interest because these cells are responsible for scar formation in fibrotic kidney disease. Recent studies suggest epithelial cells are an important source of myofibroblasts through a process described as the epithelial-to-mesenchymal transition; however, confirmatory studies in vivo are lacking. To quantitatively assess the contribution of renal epithelial cells to myofibroblasts, we used Cre/Lox techniques to genetically label and fate map renal epithelia in models of kidney fibrosis. Genetically labeled primary proximal epithelial cells cultured in vitro from these mice readily induce markers of myofibroblasts after transforming growth factor beta(1) treatment. However, using either red fluorescent protein or beta-galactosidase as fate markers, we found no evidence that epithelial cells migrate outside of the tubular basement membrane and differentiate into interstitial myofibroblasts in vivo. Thus, although renal epithelial cells can acquire mesenchymal markers in vitro, they do not directly contribute to interstitial myofibroblast cells in vivo. Lineage analysis shows that during nephrogenesis, FoxD1-positive((+)) mesenchymal cells give rise to adult CD73(+), platelet derived growth factor receptor beta(+), smooth muscle actin-negative interstitial pericytes, and these FoxD1-derivative interstitial cells expand and differentiate into smooth muscle actin(+) myofibroblasts during fibrosis, accounting for a large majority of myofibroblasts. These data indicate that therapeutic strategies directly targeting pericyte differentiation in vivo may productively impact fibrotic kidney disease.