Background: Long-term survival of lung transplants lags behind other solid organs due to early onset of a fibrotic form of chronic rejection known as chronic lung allograft dysfunction (CLAD). Preventing CLAD is difficult as multiple immunologic and physiologic insults contribute to its development. Targeting fibroblast activation, which is the final common pathway leading to CLAD, offers the opportunity to ameliorate fibrosis irrespective of the initiating insult. Thy-1 is a surface glycoprotein that controls fibroblast differentiation and activation. Methods: To study the role of Thy-1 in CLAD, we utilized the minor antigen mismatched C57BL/6 (B6wild-type) or B6Thy-1-/−→C57BL/10 (B10) model of murine orthotopic lung transplantation with postoperative bacterial infection modeled by intratracheal lipopolysaccharide (LPS) administration. The effects of LPS on Thy-1 expression, proliferation, and gene expression were assessed in fibroblasts in vitro and the therapeutic potential of Thy-1 replacement was assessed in vivo. Results: More severe CLAD was evident in B6Thy-1-/- →B10 grafts compared to B6wild-type →B10 grafts. LPS further accentuated fibrosis in B6wild-type →B10 grafts with some, but limited, effects on B6Thy-1-/- →B10 grafts. LPS contributed to Thy-1 loss from Thy-1(+) fibroblasts in vitro due to a decrease in mRNA expression. In addition, LPS promoted proliferation and upregulation of multiple inflammatory pathways in Thy-1(–) fibroblasts by gene expression analysis. Most importantly, replacement of Thy-1 through exogenous administration ameliorated the fibrotic phenotype post-LPS mediated modeling of infection. Conclusions: Our findings suggest that the loss of Thy-1 on fibroblasts is a previously unrecognized cause of CLAD and its replacement may offer therapeutic applications for amelioration of this disease post-transplantation in the setting of infectious stress responses.