In Idiopathic Pulmonary Fibrosis (IPF), there is unrelenting scarring of the lung mediated by pathological mesenchymal progenitor cells (MPCs) that manifest autonomous fibrogenicity in xenograft models. To determine where along their differentiation trajectory IPF MPCs acquire fibrogenic properties, we analyzed the transcriptome of 335 MPCs isolated from the lungs of 3 control and 3 IPF patients at the single-cell level. Using transcriptional entropy as a metric for differentiated state, we found that the least differentiated IPF MPCs displayed the largest differences in their transcriptional profile compared to control MPCs. To validate entropy as a surrogate for differentiated state functionally, we identified increased CD44 as a characteristic of the most entropic IPF MPCs. Using FACS to stratify IPF MPCs based on CD44 expression, we determined that CD44hi IPF MPCs manifested an increased capacity for anchorage-independent colony formation compared to CD44lo IPF MPCs. To validate our analysis morphologically, we used two differentially expressed genes distinguishing IPF MPCs from control (CD44, cell surface; and MARCKS, intracellular). In IPF lung tissue, pathological MPCs resided in the highly cellular perimeter region of the fibroblastic focus. Our data support the concept that IPF fibroblasts acquire a cell-autonomous pathological phenotype early in their differentiation trajectory.