Idiopathic pulmonary fibrosis (IPF) is a progressive, fatal disease, thought to be largely transforming growth factor β (TGFβ) driven, for which there is no effective therapy. We assessed the potential benefits in IPF of nitrated fatty acids (NFAs), which are unique endogenous agonists of peroxisome proliferator-activated receptor γ (PPARγ), a nuclear hormone receptor that exhibits wound-healing and antifibrotic properties potentially useful for IPF therapy. We found that pulmonary PPARγ is down-regulated in patients with IPF. In vitro, knockdown or knockout of PPARγ expression in isolated human and mouse lung fibroblasts induced a profibrotic phenotype, whereas treating human fibroblasts with NFAs up-regulated PPARγ and blocked TGFβ signaling and actions. NFAs also converted TGFβ to inactive monomers in cell-free solution, suggesting an additional mechanism through which they may inhibit TGFβ. In vivo, treating mice bearing experimental pulmonary fibrosis with NFAs reduced disease severity. Also, NFAs up-regulated the collagen-targeting factor milk fat globule-EGF factor 8 (MFG-E8), stimulated collagen uptake and degradation by alveolar macrophages, and promoted myofibroblast dedifferentiation. Moreover, treating mice with established pulmonary fibrosis using NFAs reversed their existing myofibroblast differentiation and collagen deposition. These findings raise the prospect of treating IPF with NFAs to halt and perhaps even reverse the progress of IPF.—Reddy, AT, Lakshmi, SP, Zhang, Y., Reddy, RC Nitrated fatty acids reverse pulmonary fibrosis by dedifferentiating myofibroblasts and promoting collagen uptake by alveolar macrophages.