Fibrotic obliteration of the small airways leading to progressive airflow obstruction, termed bronchiolitis obliterans syndrome (BOS), is the major cause of poor outcomes after lung transplantation. We recently demonstrated that a donor-derived population of multipotent mesenchymal stem cells (MSCs) can be isolated from the bronchoalveolar lavage (BAL) fluid of human lung transplant recipients. Herein, we study the organ specificity of these cells and investigate the role of local mesenchymal progenitors in fibrogenesis after lung transplantation. We demonstrate that human lung allograft–derived MSCs uniquely express embryonic lung mesenchyme–associated transcription factors with a 35,000-fold higher expression of forkhead/winged helix transcription factor forkhead box (FOXF1) noted in lung compared with bone marrow MSCs. Fibrotic differentiation of MSCs isolated from normal lung allografts was noted in the presence of profibrotic mediators associated with BOS, including transforming growth factor-β and IL-13. MSCs isolated from patients with BOS demonstrated increased expression of α-SMA and collagen I when compared with non-BOS controls, consistent with a stable in vivo fibrotic phenotype. FOXF1 mRNA expression in the BAL cell pellet correlated with the number of MSCs in the BAL fluid, and myofibroblasts present in the fibrotic lesions expressed FOXF1 by in situ hybridization. These data suggest a key role for local tissue-specific, organ-resident, mesenchymal precursors in the fibrogenic processes in human adult lungs.