Fibroblasts are key orchestrators of inflammation. Little is known whether these cells change phenotype during resolution of inflammation. We adopted a method to visualise fibroblast activation during inflammation in humans in vivo, which is based on a fibroblast activation protein (FAP) tracer detected by positron emission tomography (PET). While tracer accumulation was high in active arthritis, it decreased significantly after TNF- and IL-17A inhibition. Biopsy-based scRNA-seq analyses in experimental arthritis demonstrated that FAP signal reduction reflected a phenotypic switch from pro-inflammatory MMP3+/IL6+ fibroblasts (high FAP internalisation) to pro-resolving CD200+DKK3+ fibroblasts (low FAP internalisation). Spatial transcriptomics of human joints revealed that pro-resolving niches of CD200+DKK3+ fibroblasts clustered with innate lymphoid cells (ILC)2, whereas MMP3+/IL6+ fibroblasts were co-localised with inflammatory immune cells. CD200+DKK3+ fibroblasts stabilised the ILC2 phenotype and induced resolution of arthritis via CD200/CD200R1 pathway. Taken together, these data suggest a dynamic molecular regulation of the mesenchymal compartment during resolution of inflammation. Overall design: Cells from synovial joints were separated by fluorescence-activated cell sorting from R5 x R26tdTomato mice in either healthy, serum transfer arthritis (STA), or STA treated with Il23mc condition. R5-fatemap ILCs (viable CD45+ tdTomato+ CD3- TCRb- TCRgd- CD11b- GR-1-) and fibroblasts (viable CD45- GR-1-) were sorted from each animal and analyzed using scRNAseq. Libraries were generated from pooled animals, each of them individually separated by antibody hashes directed against CD45 and B2m.