Pulmonary fibrosis (PF) poses a huge burden to the patients and society due to lack of an effective treatment drug. Activation of fibrocyte, fibroblast and myofibroblasts are important steps in the development of PF. Targeting this common pathway with natural chemicals may lead to the development of new drug regimens for PF treatment. In this study, PF was induced in male Wistar rats by intratracheal administration of Bleomycin (BLM). Epigallocatechin gallate (EGCG) was administered to one of the groups of rats to test its efficacy against the development of PF. Bleomycin‐induction resulted in significant elevation of matrix metalloproteinase (MMP)‐2 and ‐9 expression, increased RNA and protein expression of transforming growth factor (TGF)‐β1, Smads and alpha‐smooth muscle actin (α‐SMA). EGCG treatment normalized the BLM induced aberrations in these rats. The protective role of EGCG was also validated in vitro using the WI‐38 fibroblast cell line. TGF‐β1 incubated cells exhibited increased fibroblast proliferation and hydroxyproline levels with a concomitant decrease in the expression of MMPs 2 and 9. An increase in protein expression levels of p‐Smad, α‐SMA and type I collagen (COL1A) was also exhibited by fibroblasts upon TGF‐β1 incubation. Simultaneous treatment of EGCG to WI‐38 cells significantly decreased these protein expressions alongside normalizing the MMPs expression. The study revealed that EGCG inhibited fibroblast activation and collagen accumulation by inhibiting TGF‐β1 signalling and thus can be considered as an effective drug against PF.