Idiopathic pulmonary fibrosis (IPF) involves collagen deposition that results in a progressive decline in lung function. This process involves activation of Smad2/3 by transforming growth factor (TGF)-beta and Wnt signaling pathways. Collagen Triple Helix Repeat-Containing-1 (Cthrc1) protein inhibits Smad2/3 activation. To test the hypothesis that Cthrc1 limits collagen deposition and the decline of lung function, Cthrc1 knockout (Cthrc1(-/-)) and wild-type mice (WT) received intratracheal injections of 2.5 U/kg bleomycin or saline. Lungs were harvested after 14 days and Bronchoalveolar lavage (BAL) TGF-beta, IL1-beta, hydroxyproline and lung compliance were assessed. TGF-beta was significantly higher in Cthrc1(-/-) compared to WT (53.45 +/- 6.15 ng/mL vs. 34.48 +/- 11.05) after saline injection. Bleomycin injection increased TGF-beta in both Cthrc1(-/-) (66.37 +/- 8.54 ng/mL) and WT (63.64 +/- 8.09 ng/mL). Hydroxyproline was significantly higher in Cthrc1(-/-) compared to WT after bleomycin-injection (2.676 +/- 0.527 lg/mg vs. 1.889 +/- 0.520, P = 0.028). Immunohistochemistry of Cthrc1(-/-) lung sections showed intracellular localization and activation of b-catenin Y654 in areas of tissue remodeling that was not evident in WT. Lung compliance was significantly reduced by bleomycin in Cthrc1(-/-) but there was no effect in WT animals. These data suggest Cthrc1 reduces fibrotic tissue formation in bleomycin-induced lung fibrosis and the effect is potent enough to limit the decline in lung function. We conclude that Cthrc1 plays a protective role, limiting collagen deposition and could form the basis of a novel therapy for pulmonary fibrosis.