Regeneration and fibrosis are integral parts of the recovery process following tissue injury, and impaired regulation of these mechanisms is a hallmark of many chronic diseases. A population of bone marrow-derived mesenchymal progenitor cells known as fibrocytes, play an important role in tissue remodeling and fibrosis in both physiologic and pathologic settings. In this review we summarize the key concepts regarding the pathophysiology of wound healing and fibrosis, and present data to support the contention that circulating fibrocytes are important in both normal repair process and aberrant healing and fibrotic damage associated with a diverse set of disease states.