Abstract Body (Do not enter title and authors here): Inflammation and tissue fibrosis co-exist and are causally linked to organ dysfunction. However, the molecular mechanisms driving immune-fibroblast crosstalk in human cardiac disease remains unexplored, and there are currently no approved treatments that directly target cardiac fibrosis. Here, we performed multi-omic single-cell gene expression, epitope mapping, and chromatin accessibility profiling in 45 donors, acutely infarcted, and chronically failing human hearts. We identified a disease-associated fibroblast trajectory marked by cell surface expression of fibroblast activator protein (FAP), which diverged into distinct myofibroblasts and pro-fibrotic fibroblast populations, the latter resembling matrifibrocytes. We lineage traced FAP fibroblasts in vivo and showed that they contribute to the POSTN lineage but not the myofibroblast lineage. We assessed the applicability of experimental systems to model tissue fibrosis and demonstrated that 3 different in vivo mouse models of cardiac injury were superior compared to cultured human heart and dermal fibroblasts in recapitulating the human disease phenotype. Ligand-receptor analysis and spatial transcriptomics predicted that interactions between C-C chemokine receptor type 2 (CCR2) macrophages and fibroblasts mediated by interleukin 1 beta (IL-1) signaling drove the emergence of pro-fibrotic fibroblasts within spatially defined niches. In vivo, we deleted the IL-1 receptor on fibroblasts, the IL-1 ligand in CCR2 monocytes and macrophages, and inhibited IL-1 signaling using a monoclonal antibody and showed fewer pro-fibrotic fibroblasts, decreased cardiac fibrosis, and improved cardiac function. Herein, we characterize fibroblast lineage diversification in the failing heart and showed a subset of macrophages signal to fibroblasts via IL-1 and rewire their gene regulatory network and differentiation trajectory towards a pro-fibrotic fibroblast phenotype. These findings highlight the broader therapeutic potential of targeting inflammation to treat tissue fibrosis and preserve organ function.