Idiopathic pulmonary fibrosis (IPF) is a progressive lung disease with no effective medication. Andrographolide (Andro), extracted from Chinese herbal Andrographis paniculata, could attenuate bleomycin (BLM)-induced pulmonary fibrosis via inhibition of inflammation and oxidative stress, however, the anti-fibrotic mechanisms have not been clarified. Myofibroblasts are the primary cell types responsible for the accumulation of extracellular matrix (ECM) in fibrotic diseases, and targeting fibroblast proliferation and differentiation is an important therapeutic strategy for the treatment of IPF. Hence, this study aimed to investigate the effects of Andro on the fibroblast proliferation and differentiation in the in vivo and in vitro models. The results showed that Andro improved pulmonary function and inhibited BLM-induced fibroblast proliferation and differentiation and ECM deposition in the lungs. In vitro, Andro inhibited proliferation and induced apoptosis of TGF-β1-stimulated NIH 3T3 fibroblasts and primary lung fibroblasts (PLFs). Andro also inhibited TGF-β1-induced myofibroblast differentiation and ECM deposition in both cells. We also found that Andro suppressed TGF-β1-induced Smad2/3 and Erk1/2 activation, suggesting that Smad2/3 and Erk1/2 inactivation mediates Andro-induced effects on TGF-β1-induced fibroblast proliferation and differentiation. These results indicated that Andro has novel and potent anti-fibrotic effects in lung fibroblasts via inhibition of the proliferation and myofibroblast differentiation of fibroblasts and subsequent ECM deposition, which are modulated by TGF-β1-mediated Smad-dependent and -independent pathways.