Scleroderma is a multisystem fibroproliferative disease with no effective medical treatment. Myofibroblasts are critical to the fibrogenic tissue repair process in the skin and many internal organs. Emerging data support a role for both matrix stiffness, and transforming growth factor β1 (TGFβ1), in myofibroblast differentiation. Transient receptor potential vanilloid 4 (TRPV4) is a mechanosensitive ion channel activated by both mechanical and biochemical stimuli. The objective of this study was to determine the role of TRPV4 in TGFβ1- and matrix stiffness-induced differentiation of dermal fibroblasts. We found that TRPV4 channels are expressed and functional in both human (HDF) and mouse (MDF) dermal fibroblasts. TRPV4 activity (agonist-induced Ca²⁺ influx) was induced by both matrix stiffness and TGFβ1 in dermal fibroblasts. TGFβ1 induced expression of TRPV4 proteins in a dose-dependent manner. Genetic ablation or pharmacological antagonism of TRPV4 channel abrogated Ca²⁺ influx and both TGFβ1-induced and matrix stiffness-induced myofibroblast differentiation as assessed by 1) α-smooth muscle actin expression/incorporation into stress fibers, 2) generation of polymerized actin, and 3) expression of collagen-1. We found that TRPV4 inhibition abrogated TGFβ1-induced activation of AKT but not of Smad2/3, suggesting that the mechanism by which profibrotic TGFβ1 signaling in dermal fibroblasts is modified by TRPV4 may be through non-Smad pathways. Altogether, these data identify a novel reciprocal functional link between TRPV4 activation and TGFβ1 signals regulating dermal myofibroblast differentiation. These findings suggest that therapeutic inhibition of TRPV4 activity may provide a targeted approach to the treatment of scleroderma.