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Background: Fibrosis is often associated with aberrant repair mechanisms that ultimately lead to organ failure. In the lung, idiopathic pulmonary fibrosis (IPF) is a fatal form of interstitial lung disease (ILD) to which there is currently no curative therapy. From the cell biology point of view, the cell of origin and eventual fate of activated myofibroblasts (aMYFs) have taken center stage as these cells are believed to drive structural remodeling and lung function impairment. While aMYFs are now widely believed to originate from resident fibroblasts, the heterogeneity of aMYFs and ultimate fate during fibrosis resolution remain elusive. We have previously shown that aMYFs dedifferentiation and acquisition of a lipofibroblast (LIF)-like phenotype represent a route of fibrosis resolution., Methods: In this study, we combined genetic lineage tracing and single-cell transcriptomics in mice, and data mining of human IPF datasets to decipher the heterogeneity of aMYFs and investigate differentiation trajectories during fibrosis resolution. Furthermore, organoid cultures were utilized as a functional readout for the alveolar mesenchymal niche activity during various phases of injury and repair in mice., Results: Our data demonstrate that aMYFs consist of four subclusters displaying unique pro-alveologenic versus profibrotic profiles. Alveolar fibroblasts displaying a high LIF-like signature largely constitute both the origin and fate of aMYFs during fibrogenesis and resolution respectively. The heterogeneity of aMYFs is conserved in humans and a significant proportion of human aMYFs displays a high LIF signature., Conclusion: Our work identifies a subcluster of aMYFs that is potentially relevant for future management of IPF., (Copyright ©The authors 2024.)