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While past studies have suggested that plasticity exists between dermal fibroblasts and adipocytes, it remains unknown whether fat actively contributes to fibrosis in scarring. We show that adipocytes convert to scar-forming fibroblasts in response to Piezo-mediated mechanosensing to drive wound fibrosis. We establish that mechanics alone are sufficient to drive adipocyte-to-fibroblast conversion. By leveraging clonal-lineage-tracing in combination with scRNA-seq, Visium, and CODEX, we define a mechanically naive fibroblast-subpopulation that represents a transcriptionally intermediate state between adipocytes and scar-fibroblasts. Finally, we show that Piezo1 or Piezo2-inhibition yields regenerative healing by preventing adipocytes activation to fibroblasts, in both mouse-wounds and a novel human-xenograft-wound model. Importantly, Piezo1-inhibition induced wound regeneration even in pre-existing established scars, a finding that suggests a role for adipocyte-to-fibroblast transition in wound remodeling, the least-understood phase of wound healing. Adipocyte-to-fibroblast transition may thus represent a therapeutic target for minimizing fibrosis via Piezo-inhibition in organs where fat contributes to fibrosis.