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TGFβ1 plays a regulatory role in the determination of renal cell fate and the progression of renal fibrosis. Here we show an association between SMAD3 and the histone methyltransferase, EZH2, during cell differentiation; ChIP-seq revealed that SMAD3 and EZH2 co-occupy the genome in iPSCs and in iPSC-derived nephron progenitors. Through integration of single cell gene expression and epigenome profiling, we identified de novo ACTA2+ve/POSTN+ve myofibroblasts in kidney organoids treated with TGFβ1, characterised by increased SMAD3-dependent cis chromatin accessibility and gene expression associated with fibroblast activation. We have identified fibrosis-associated regulons characterised by enrichment of SMAD3, AP1, the ETS family of transcription factors, and NUAK1, CREB3L1, and RARG, corresponding to enriched motifs at accessible loci identified by scATACseq. Treatment with the EZH2 specific inhibitor GSK343, blocked SMAD3-dependent cis co-accessibility and inhibited myofibroblast activation. This mechanism, through which TGFβ signals directly to chromatin, represents a critical determinant of fibrotic, differentiated states. Multimodal single-cell analysis on iPSC-derived kidney organoids shows that inhibiting EZH2 attenuates TGFβ1-induced fibrotic gene expression and changes in chromatin accessibility, highlighting a potential therapeutic strategy for renal fibrosis. [ABSTRACT FROM AUTHOR]