Systemic sclerosis (SSc) is an autoimmune disease characterized by extensive skin and internal organ fibrosis. However, the mechanism underlying fibrosis remains unclear, and effective treatments for halting or reversing fibrosis are lacking. In this study, single‐cell RNA sequencing is used to obtain a comprehensive overview of skin cells from patients with SSc and healthy controls. A subset of basal cells with high chitinase 3‐like 1 (Chi3L1) expression, which potentially plays an important role in fibroblast activation, is identified in SSc. Subsequently, patients with SSc are present with increased expression of Chi3L1 in the skin and serum, and elevated serum levels are associated with skin induration and pulmonary function. Furthermore, Chi3L1 promoted the differentiation of SSc dermal fibroblasts into myofibroblasts, and Chi3L1‐deficient (Chi3L1‐/‐) mice showed amelioration of fibrosis in a bleomycin‐induced SSc (BLM‐SSc) model. Mechanistically, Chi3L1 mediates fibroblast activation primarily by interacting with interleukin‐17 receptor A (IL‐17RA), thereby initiating downstream nuclear factor kappa B and mitogen‐activated protein kinases signaling pathways. Moreover, the anti‐fibrotic effect of IL‐17RA antagonists in BLM‐SSc mice is demonstrated. In conclusion, Chi3L1 is a potential biomarker for the degree of fibrosis in SSc. Chi3L1 and its receptor, IL‐17RA, are promising therapeutic targets for patients with SSc.