Despite the well-described role of noncellular components of the tumor microenvironment (TME) in regulating tumor growth, the molecular events dictating expression and biological functions of key components of the TME remain elusive. Here, using pancreatic cancer (PC) models, we describe a novel mechanism through which the zinc finger transcription factor GLI2 in cancer-associated fibroblasts (CAFs) induces expression of COL1A1, which is a major component of type I collagen, the most abundant collagen variant in the tumor milieu. Bulk and single-nuclei RNA-Seq showed that GLI2 expression in CAF strongly correlates with COL1A1 expression levels, fibrosis, and CAF activation. Chromatin immunoprecipitation-quantitative PCR and expression studies of the PC matrisome identified COL1A1 as the direct target of GLI2 in CAFs. We also provide evidence that GLI2 is an effector that mediates COL1A1 induction by transforming growth factor β1. RNA-Seq analysis of PC cells treated with type I collagen revealed enrichment of chemotherapeutic gene expression profiles, which includes irinotecan resistance signature. Viability studies confirmed that type I collagen promotes irinotecan resistance in PC cells. Altogether, our results uncover a novel role for the transforming growth factor β1-GLI2 axis within CAFs to modulate type I collagen expression and promote chemoresistance in PC cells. Together, our findings help increase the understanding of the complex molecular network operating in the TME.