Pulmonary fibrosis is caused by excessive proliferation and accumulation of stromal cells. Fibrocytes are bone marrow (BM)-derived cells that contribute to pathologic stromal cell accumulation in human lung disease. However, the cellular source for these stromal cells and the degree of fibrocyte contribution to pulmonary fibrosis remain unclear. To determine the etiology of stromal cell excess during pulmonary fibrosis, we measured fibrocytes during the progression of fibrosis in the transforming growth factor (TGF)-α transgenic mouse model. Lung epithelial-specific overexpression of TGF-α led to progressive pulmonary fibrosis associated with increased accumulation of fibrocytes in the fibrotic lesions. Although reconstitution of BM cells into TGF-α mice demonstrated accumulation of these cells in fibrotic lesions, the majority of the cells did not express α-smooth muscle actin, suggesting that fibrocytes did not transform into myofibroblasts. To explore the mechanisms of fibrocytes in pulmonary fibrogenesis, adoptive cell-transfer experiments were performed. Purified fibrocytes were transferred intravenously into TGF-α transgenic mice, and fibrosis endpoints were compared with controls. Analysis of lung histology and hydroxyproline levels demonstrated that fibrocyte transfers augment TGF-α-induced lung fibrosis. A major subset of TGF-α-induced fibrocytes expressed CD44 and displayed excessive invasiveness, which is attenuated in the presence of anti-CD44 antibodies. Coculture experiments of resident fibroblasts with fibrocytes demonstrated that fibrocytes stimulate proliferation of resident fibroblasts. In summary, fibrocytes are increased in the progressive, fibrotic lesions of TGF-α-transgenic mice and activate resident fibroblasts to cause severe lung disease.