Idiopathic Pulmonary Fibrosis is a lethal fibrotic disease characterized by the unrelenting proliferation and persistence of fibroblasts in a type I collagen-rich matrix that result in an expanding reticular network of fibrotic tissue. However, the underlying mechanism responsible for the persistence of myofibroblasts in IPF remains unclear. During normal tissue repair, unwanted fibroblasts are eliminated during collagen-matrix contraction by a mechanism whereby high PTEN activity suppresses Akt. We have previously found that FoxO3a, a transcriptional activator of apoptosis-inducing proteins, is inactivated in IPF fibroblasts resulting from aberrantly high PI3K/Akt activity due to inappropriately low PTEN activity. Here we demonstrate that this low FoxO3a activity confers IPF fibroblasts with resistance to collagen-mediated apoptosis. We show that the mechanism by which low FoxO3a activity confers IPF fibroblasts with an apoptotic resistant phenotype involves suppression of Fas expression as a result of down regulation of cav-1 expression via a PTEN/Akt-dependent pathway. We demonstrate that PTEN over-expression or Akt inhibition increases FoxO3a expression in IPF fibroblasts, resulting in up-regulation of caveolin-1. We show that FoxO3a binds to the cav-1 promoter region and ectopic expression of FoxO3a transcriptionally increases cav-1 mRNA and protein expression. In turn, we show that overexpression of caveolin-1 increases Fas levels and caspase-3/7 activity and promotes IPF fibroblast apoptosis on polymerized type I collagen. We have found that the expression of caveolin-1, Fas and cleaved caspase-3 proteins in fibroblasts within the fibroblastic foci of IPF patient specimens is low. Our data indicate that the pathologically altered PTEN/Akt axis inactivates FoxO3a down-regulating cav-1 and Fas expression. This confers IPF fibroblasts with an apoptosis-resistant phenotype and may be responsible for IPF progression.