Retinal diseases are frequently characterized by the accumulation of excessive scar tissue found throughout the neural retina. However, the pathophysiology of retinal fibrosis remains poorly understood, and the cell types that contribute to the fibrotic response are incompletely defined. Here, we show that myofibroblast differentiation of mural cells contributes directly to retinal fibrosis. Using lineage tracing technology, we demonstrate that after chemical ocular injury, Myh11+ mural cells detach from the retinal microvasculature and differentiate into myofibroblasts to form an epiretinal membrane. Inhibition of TGFβR attenuates Myh11+ retinal mural cell myofibroblast differentiation, and diminishes the subsequent formation of scar tissue on the surface of the retina. We demonstrate retinal fibrosis within a murine model of oxygen-induced retinopathy resulting from the intravitreal injection of adipose Myh11-derived mesenchymal stem cells, with ensuing myofibroblast differentiation. In this model, inhibiting TGFβR signaling does not significantly alter myofibroblast differentiation and collagen secretion within the retina. This work shows the complexity of retinal fibrosis, where scar formation is regulated both by TGFβR and non-TGFβR dependent processes involving mural cells and derived mesenchymal stem cells. It also offers a cautionary note on the potential deleterious, pro-fibrotic effects of exogenous MSCs once intravitreally injected into clinical patients.