In chronic kidney disease, fibroblast dysfunction causes renal fibrosis and renal anemia. Renal fibrosis is mediated by the accumulation of myofibroblasts, whereas renal anemia is mediated by the reduced production of fibroblast-derived erythropoietin, a hormone that stimulates erythropoiesis. Despite their importance in chronic kidney disease, the origin and regulatory mechanism of fibroblasts remain unclear. Here, we have demonstrated that the majority of erythropoietin-producing fibroblasts in the healthy kidney originate from myelin protein zero-Cre (P0-Cre) lineage-labeled extrarenal cells, which enter the embryonic kidney at E13.5. In the diseased kidney, P0-Cre lineage-labeled fibroblasts, but not fibroblasts derived from injured tubular epithelial cells through epithelial-mesenchymal transition, transdifferentiated into myofibroblasts and predominantly contributed to fibrosis, with concomitant loss of erythropoietin production. We further demonstrated that attenuated erythropoietin production in transdifferentiated myofibroblasts was restored by the administration of neuroprotective agents, such as dexamethasone and neurotrophins. Moreover, the in vivo administration of tamoxifen, a selective estrogen receptor modulator, restored attenuated erythropoietin production as well as fibrosis in a mouse model of kidney fibrosis. These findings reveal the pathophysiological roles of P0-Cre lineage-labeled fibroblasts in the kidney and clarify the link between renal fibrosis and renal anemia.