Profibrotic cells that develop upon injury generate permanent scar tissue and impair organ recovery, though their origin and fate are unclear. Here we show that transient expression of ADAM12 (a disintegrin and metalloprotease 12) identifies a distinct proinflammatory subset of platelet-derived growth factor receptor-α-positive stromal cells that are activated upon acute injury in the muscle and dermis. By inducible genetic fate mapping, we demonstrate in vivo that injury-induced ADAM12(+) cells are specific progenitors of a major fraction of collagen-overproducing cells generated during scarring, which are progressively eliminated during healing. Genetic ablation of ADAM12(+) cells, or knockdown of ADAM12, is sufficient to limit generation of profibrotic cells and interstitial collagen accumulation. ADAM12(+) cells induced upon injury are developmentally distinct from muscle and skin lineage cells and are derived from fetal ADAM12(+) cells programmed during vascular wall development. Thus, our data identify injury-activated profibrotic progenitors residing in the perivascular space that can be targeted through ADAM12 to limit tissue scarring.