Bladder carcinoma (BC) recurrence is a major clinical challenge, and targeting the tumor microenvironment (TME) is a promising therapy. However, the relationship between individual TME components, particularly cancer-associated fibroblasts (CAFs), and tumor recurrence is unclear. Here, TME heterogeneity in primary and recurrent BC is investigated using single-cell RNA sequence profiling of 62460 cells. Two cancer stem cell (CSC) subtypes are identified in recurrent BC. An inflammatory CAF subtype, ICAM1+ iCAFs, specifically associated with BC recurrence is also identified. iCAFs are found to secrete FGF2, which acts on the CD44 receptor of rCSC-M, thereby maintaining tumor stemness and epithelial-mesenchymal transition. Additionally, THBS1+ monocytes, a group of myeloid-derived suppressor cells (MDSCs), are enriched in recurrent BC and interacted with CAFs. ICAM1+ iCAFs are found to secrete CCL2, which binds to CCR2 in MDSCs. Moreover, elevated STAT3, NFKB2, VEGFA, and CTGF levels in iCAFs reshape the TME in recurrent tumors. CCL2 inhibition in an in situ BC mouse model suppressed tumor growth, decreased MDSCs and Tregs, and fostered tumor immune suppression. The study results highlight the role of iCAFs in TME cell-cell crosstalk during recurrent BC. The identification of pivotal signaling factors driving BC relapse is promising for the development of novel therapies.