Fibroblasts provide matrix and regulatory mediators to the microenvironment and thereby contribute to maintenance of tissue homeostasis, wound healing, and tumor progression. In the present study, we addressed the functional relevance of Thy-1 for fibroblast functions in vitro and in vivo. Using fibroblasts from Thy-1^-/- and wild-type mice, recombinant expression of Thy-1, and analysis of the interaction of fibroblasts with immobilized Thy-1, we showed that Thy-1 has a crucial role in the control of cell growth by suppressing proliferation and promoting apoptosis and differentiation of dermal fibroblasts. Function-blocking studies revealed that Thy-1 mediates the control of apoptosis and proliferation via modulation of β3 integrin function. Interestingly, Thy-1-mediated growth control appears to be a more general mechanism because it also regulates growth of tumor cells of different origin dependent on their β3 integrin expression. In summary, our findings point to an important role of Thy-1 in controlling the balance between proliferation and differentiation in dermal fibroblasts.