Epithelial cells have been suggested as potential drivers of lung fibrosis, although the epithelial-dependent pathways that promote fibrogenesis remain unknown. Extracellular matrix is increasingly recognized as an environment that can drive cellular responses in various pulmonary diseases. In this study, we demonstrate that transforming growth factor-β1 (TGF-β1)-stimulated mouse tracheal basal (MTB) cells produce provisional matrix proteins in vitro, which initiate mesenchymal changes in subsequently freshly plated MTB cells via Rho kinase- and c-Jun NH₂-terminal kinase (JNK1)-dependent processes. Repopulation of decellularized lung scaffolds, derived from mice with bleomycin-induced fibrosis or from patients with idiopathic pulmonary fibrosis, with wild-type MTB cells resulted in a loss of epithelial gene expression and augmentation of mesenchymal gene expression compared with cells seeded into decellularized normal lungs. In contrast, Jnk1^−/−basal cells seeded into fibrotic lung scaffolds retained a robust epithelial expression profile, failed to induce mesenchymal genes, and differentiated into club cell secretory protein-expressing cells. This new paradigm wherein TGF-β1-induced extracellular matrix derived from MTB cells activates a JNK1-dependent mesenchymal program, which impedes subsequent normal epithelial cell homeostasis, provides a plausible scenario of chronic aberrant epithelial repair, thought to be critical in lung fibrogenesis. This study identifies JNK1 as a possible target for inhibition in settings wherein reepithelialization is desired.