Lung fibrosis is characterized by vascular leakage and myofibroblast recruitment, and both phenomena are mediated by lysophosphatidic acid (LPA) via its type-1 receptor (LPA1). Following lung damage, the accumulated myofibroblasts activate and secrete excessive extracellular matrix (ECM), and form fibrotic foci. Studies have shown that bone marrow-derived cells are an important source of myofibroblasts in the fibrotic organ. However, the type of cells in the bone marrow contributing predominantly to the myofibroblasts and the involvement of LPA-LPA1 signalling in this is yet unclear. Using a bleomycin-induced mouse lung-fibrosis model with an enhanced green fluorescent protein (EGFP) transgenic mouse bone marrow replacement, we first demonstrated that bone marrow derived-mesenchymal stem cells (BMSCs) migrated markedly to the bleomycin-injured lung. The migrated BMSC contributed significantly to α-smooth muscle actin (α-SMA)-positive myofibroblasts. By transplantation of GFP-labelled human BMSC (hBMSC) or EGFP transgenic mouse BMSC (mBMSC), we further showed that BMSC might be involved in lung fibrosis in severe combined immune deficiency (SCID)/Beige mice induced by bleomycin. In addition, using quantitative-RT-PCR, western blot, Sircol collagen assay and migration assay, we determined the underlying mechanism was LPA-induced BMSC differentiation into myofibroblast and the secretion of ECM via LPA1. By employing a novel LPA1 antagonist, Antalpa1, we then showed that Antalpa1 could attenuate lung fibrosis by inhibiting both BMSC differentiation into myofibroblast and the secretion of ECM. Collectively, the above findings not only further validate LPA1 as a drug target in the treatment of pulmonary fibrosis but also elucidate a novel pathway in which BMSCs contribute to the pathologic process. © 2013 The Authors.