Pulmonary fibrosis is a progressive, dysregulated response to injury culminating in compromised lung function due to excess extracellular matrix production. The heparan sulfate proteoglycan syndecan-4 is important in mediating fibroblast-matrix interactions, but its role in pulmonary fibrosis has not been explored. To investigate this issue, we used intratracheal instillation of bleomycin as a model of acute lung injury and fibrosis. We found that bleomycin treatment increased syndecan-4 expression. Moreover, we observed a marked decrease in neutrophil recruitment and an increase in both myofibroblast recruitment and interstitial fibrosis in bleomycin-treated syndecan-4–null (Sdc4^–/–) mice. Subsequently, we identified a direct interaction between CXCL10, an antifibrotic chemokine, and syndecan-4 that inhibited primary lung fibroblast migration during fibrosis; mutation of the heparin-binding domain, but not the CXCR3 domain, of CXCL10 diminished this effect. Similarly, migration of fibroblasts from patients with pulmonary fibrosis was inhibited in the presence of CXCL10 protein defective in CXCR3 binding. Furthermore, administration of recombinant CXCL10 protein inhibited fibrosis in WT mice, but not in Sdc4^–/– mice. Collectively, these data suggest that the direct interaction of syndecan-4 and CXCL10 in the lung interstitial compartment serves to inhibit fibroblast recruitment and subsequent fibrosis. Thus, administration of CXCL10 protein defective in CXCR3 binding may represent a novel therapy for pulmonary fibrosis.