Remyelination failure is a crucial component of disease progression in the autoimmune demyelinating disease Multiple Sclerosis (MS). The regenerative capacity of oligodendrocyte progenitor cells (OPCs) to replace myelinating oligodendrocytes is likely influenced by many aspects of the lesion environment including inflammatory signaling and extracellular matrix (ECM) deposition. These features of MS lesions are typically attributed to infiltrating leukocytes and reactive astrocytes. Here we demonstrate that fibroblasts also contribute to the inhibitory environment in the animal model of MS, experimental autoimmune encephalomyelitis (EAE). Using Col1α1GFP transgenic mice, we show that perivascular fibroblasts are activated in the spinal cord at EAE onset, and infiltrate the parenchyma by the peak of behavioral deficits where they are closely associated with areas of demyelination, myeloid cell accumulation, and ECM deposition. We further show that both fibroblast conditioned media and fibroblast ECM inhibit the differentiation of OPCs into mature oligodendrocytes. Taken together, our results indicate that the fibrotic scar is a major component of EAE pathology that leads to an inhibitory environment for remyelination, thus raising the possibility that anti-fibrotic mechanisms may serve as novel therapeutic targets for MS.