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Background: Mast-Cell Expressed Membrane Protein-1 (MCEMP1) is higher in Idiopathic Pulmonary Fibrosis (IPF) patients with increased risk of death and poor outcomes. Here we seek to establish the mechanistic role of MCEMP1 in pulmonary fibrosis., Methods: MCEMP1 expression was analyzed by single-cell RNA sequencing, immunofluorescence in Peripheral Blood Mononuclear Cells (PBMC) as well as in lung tissues from IPF patients and controls. Chromatin Immunoprecipitation (ChiP) and Proximity Ligation Assay (PLA) were used to study the transcriptional regulation of MCEMP1 . Transient RNA interference and lentivirus transduction were used to knockdown and knock-in MCEMP1 in THP-1 cells to study chemotaxis, adhesion, and migration. Bulk RNA sequencing was used to identify the mechanisms by which MCEMP1 participates in monocyte function. Active RHO pull-down assay was used to validate bulk RNA sequencing results., Results: We identified increased MCEMP1 expression in classical monocytes and alveolar macrophages in IPF compared to controls. MCEMP1 was upregulated by TGFβ at the mRNA and protein levels in THP-1. TGFβ-mediated MCEMP1 upregulation results from the cooperation of SMAD3 and SP1 via concomitant binding to SMAD3/SP1 cis -regulatory elements within the MCEMP1 promoter. In terms of its function, we found that MCEMP1 regulates TGFβ-mediated monocyte chemotaxis, adhesion, and migration. 400 differentially expressed genes were found to increase after TGFβ stimulation of THP-1, further increased in MCEMP1 knock-in cells treated with TGFβ and decreased in MCEMP1 knockdown cells treated with TGFβ. GO annotation analysis of these genes showed enrichment for positive regulation of RHO GTPase activity and signal transduction. While TGFβ enhanced RHO GTPase activity in THP-1 cells, this effect was attenuated following MCEMP1 knockdown., Conclusion: MCEMP1 is highly expressed in circulating classical monocytes and alveolar macrophages in IPF. MCEMP1 is regulated by TGFβ and participates in the chemotaxis, adhesion, and migration of circulating monocytes by modulating the effect of TGFβ in RHO activity. Our results suggest that MCEMP1 may regulate the migration and transition of monocytes to monocyte-derived alveolar macrophages during pulmonary fibrosis development and progression.