An emerging paradigm proposes a crucial role for lung resident mesenchymal stem cells (LR-MSCs) via a fibroblastic transdifferentiation event in the pathogenesis of idiopathic pulmonary fibrosis (IPF). Aberrant activation of Wnt/β-catenin signaling occurs in virtually all fibrotic lung diseases and is relevant to the differentiation of mesenchymal stem cells (MSCs). In vitro, by measuring the protein levels of several key components involved in Wnt/β-catenin signaling, we confirmed that this signaling pathway was activated in the myofibroblast differentiation of LR-MSCs. Targeted inhibition of Wnt/β-catenin signaling by a small molecule, ICG-001, dose-dependently impeded the proliferation and transforming growth factor-β1 (TGF-β1)-mediated fibrogenic actions of LR-MSCs. In vivo, ICG-001 exerted its lung protective effects after bleomycin treatment through blocking mesenchymal-myofibroblast transition, repressing matrix gene expression, and reducing cell apoptosis. Moreover, delayed administration of ICG-001 attenuated bleomycin-induced lung fibrosis, which may present a promising therapeutic strategy for intervention of IPF. Interestingly, these antifibrotic actions of ICG-001 are operated by a mechanism independent of any disruption of Smad activation. In conclusion, our study demonstrated that Wnt/β-catenin signaling may be an essential mechanism underlying the regulation of myofibroblast differentiation of LR-MSCs and their further participation in the development of pulmonary fibrosis.