Fibroblasts are stromal cells known to regulate local immune responses important for wound healing and scar formation; however, the cellular mechanisms driving damage and scarring in patients with cutaneous lupus erythematosus (CLE) remain poorly understood. Dermal fibroblasts in patients with systemic lupus erythematosus (SLE) experience increased cytokine signaling in vivo, but the effect of inflammatory mediators on fibroblast responses in nonscarring versus scarring CLE subtypes is unclear. Here, we examined responses to cytokines in dermal fibroblasts from nonlesional skin of 22 patients with SLE and CLE and 34 individuals acting as healthy controls. Notably, inflammatory cytokine responses were exaggerated in SLE fibroblasts compared with those from individuals acting as healthy controls. In lesional CLE biopsies, these same inflammatory profiles were reflected in single-cell RNA-Seq of SFRP2+ and inflammatory fibroblast subsets, and TGF-β was identified as a critical upstream regulator for inflammatory fibroblasts in scarring discoid lupus lesions. In vitro cytokine stimulation of nonlesional fibroblasts from patients who scar from CLE identified an upregulation of collagens, particularly in response to TGF-β, whereas inflammatory pathways were more prominent in nonscarring patients. Our study revealed that SLE fibroblasts are poised to hyperrespond to inflammation, with differential responses among patients with scarring versus nonscarring disease, providing a potential skin-specific target for mitigating damage.