Idiopathic pulmonary fibrosis (IPF) is a relentlessly progressive lung disease in which fibroblasts accumulate in the alveolar wall within a type I collagen-rich matrix. Although lung fibroblasts derived from patients with IPF display durable pathological alterations in proliferative function, the molecular mechanisms differentiating IPF fibroblasts from their normal counterparts remain unknown. Polymerized type I collagen normally inhibits fibroblast proliferation, providing a physiological mechanism to limit fibroproliferation after tissue injury. We demonstrate that beta1 integrin interaction with polymerized collagen inhibits normal fibroblast proliferation by suppression of the phosphoinositide 3-kinase (PI3K)-Akt-S6K1 signal pathway due to maintenance of high phosphatase activity of the tumor suppressor phosphatase and tensin homologue (PTEN). In contrast, IPF fibroblasts eluded this restraint, displaying a pathological pattern of beta1 integrin signaling in response to polymerized collagen that leads to aberrant activation of the PI3K-Akt-S6K1 signal pathway caused by inappropriately low PTEN activity. Mice deficient in PTEN showed a prolonged fibroproliferative response after tissue injury, and immunohistochemical analysis of IPF lung tissue demonstrates activation of Akt in cells within fibrotic foci. These results provide direct evidence for defective negative regulation of the proliferative pathway in IPF fibroblasts and support the theory that the pathogenesis of IPF involves an intrinsic fibroblast defect.