Intrauterine adhesion (IUA) is characterized by endometrial fibrosis, which ultimately leads to menstrual abnormalities, infertility, and recurrent miscarriages. The Shh/Gli2 pathway plays a critical role in tissue fibrogenesis and regeneration; Gli2 activation induces profibrogenic effects in various tissues, such as the liver and kidney. However, the role of Gli2 in endometrial fibrosis remains unknown. The purpose of this study was to test the hypothesis that activated Gli2 promotes endometrial fibrosis. Endometrial samples from moderate and severe IUA patients exhibited significantly enhanced expression of Gli2 compared with normal endometrial samples and mild IUA samples. Transfection with overactive Gli2 plasmids induced higher fibrosis-related protein expression, while blocking Gli2 signaling with cyclopamine caused the opposite effect in endometriotic stromal cells (ESCs), including inducing cell-cycle arrest. Menstrual-derived stem cell conditioned medium (MenSCs-CM) reduced endometrial fibrosis by reducing Gli2 protein levels and causing cell-cycle arrest in ESCs through granulocyte-colony stimulating factor (G-CSF). The effect was weakened after neutralization with a G-CSF antibody. Gli2 overexpression reduced the effects of MenSC-CM and G-CSF on fibrosis and cell-cycle progression in vitro. The antifibrotic effect of G-CSF was also observed in murine model. These findings demonstrate that Gli2 signaling promotes endometrial fibrosis, and the inhibition of Gli2 through MenSCs-secreted G-CSF may be of therapeutic value for managing endometrial fibrosis.