Fibrosis-associated fibroblasts have been identified across various fibrotic disorders, but not in the context of biomaterials, fibrotic encapsulation, and the foreign body response. In other fibrotic disorders, a fibroblast subpopulation defined by Thy-1 loss is strongly correlated with fibrosis yet we do not know what promotes Thy-1 loss. We have previously shown that Thy-1 is an integrin regulator enabling normal fibroblast mechanosensing, and here, leveraging nonfibrotic microporous annealed particle (MAP) hydrogels versus classical fibrotic bulk hydrogels, we demonstrate that Thy1-/- mice mount a fibrotic response to MAP gels that includes inflammatory signaling. We found that a distinct and cryptic α-smooth muscle actin-positive Thy-1- fibroblast population emerges in response to interleuklin-1β (IL-1β) and tumor necrosis factor-α (TNFα). Furthermore, IL-1β/TNFα-induced Thy-1- fibroblasts consist of two distinct subpopulations that are strongly proinflammatory. These findings illustrate the emergence of a unique proinflammatory, profibrotic fibroblast subpopulation that is central to fibrotic encapsulation of biomaterials.