Cardiac fibrosis, associated with a decreased extent of microvasculature and with disruption of normal myocardial structures, results from excessive deposition of extracellular matrix, which is mediated by the recruitment of fibroblasts. The source of these fibroblasts is unclear and specific anti-fibrotic therapies are not currently available. Here we show that cardiac fibrosis is associated with the emergence of fibroblasts originating from endothelial cells, suggesting an endothelial-mesenchymal transition (EndMT) similar to events that occur during formation of the atrioventricular cushion in the embryonic heart. Transforming growth factor-beta1 (TGF-beta1) induced endothelial cells to undergo EndMT, whereas bone morphogenic protein 7 (BMP-7) preserved the endothelial phenotype. The systemic administration of recombinant human BMP-7 (rhBMP-7) significantly inhibited EndMT and the progression of cardiac fibrosis in mouse models of pressure overload and chronic allograft rejection. Our findings show that EndMT contributes to the progression of cardiac fibrosis and that rhBMP-7 can be used to inhibit EndMT and to intervene in the progression of chronic heart disease associated with fibrosis.