Extracellular matrix (ECM) interactions regulate both the cell transcriptome and proteome, thereby determining cell fate. Traumatic heterotopic ossification (HO) is a disorder characterized by aberrant mesenchymal lineage (MLin) cell differentiation, forming bone within soft tissues of the musculoskeletal system following traumatic injury. Recent work has shown that HO is influenced by ECM-MLin cell receptor signaling, but how ECM binding affects cellular outcomes remains unclear. Using time course transcriptomic and proteomic analyses, we identified discoidin domain receptor 2 (DDR2), a cell surface receptor for fibrillar collagen, as a key MLin cell regulator in HO formation. Inhibition of DDR2 signaling, through either constitutive or conditional Ddr2 deletion or pharmaceutical inhibition, reduced HO formation in mice. Mechanistically, DDR2 perturbation alters focal adhesion orientation and subsequent matrix organization, modulating Focal Adhesion Kinase (FAK) and Yes1 Associated Transcriptional Regulator and WW Domain Containing Transcription Regulator 1 (YAP/TAZ)–mediated MLin cell signaling. Hence, ECM-DDR2 interactions are critical in driving HO and could serve as a previously unknown therapeutic target for treating this disease process.