A growing body of evidence points toward activated fibroblasts, also known as myofibroblasts, as one of the leading mediators in several major human pathologies including proliferative fibrotic disorders, invasive tumor growth, rheumatoid arthritis, and atherosclerosis. Niemann-Pick Type C2 (NPC2) protein has been recently identified as a product of the second gene in NPC disease. It encodes ubiquitous, highly conserved, secretory protein with the poorly defined function. Here we show that NPC2 deficiency in human fibroblasts confers their activation. The activation phenomenon was not limited to fibroblasts as it was also observed in aortic smooth muscle cells upon silencing NPC2 gene by siRNA. More importantly, activated synovial fibroblasts isolated from patients with rheumatoid arthritis were also identified as NPC2-deficient at both the NPC2 mRNA and protein levels. The molecular mechanism responsible for activation of NPC2-null cells was shown to be a sustained phosphorylation of ERK 1/2 mitogen-activated protein kinase (MAPK), which fulfills both the sufficient and necessary fibroblast activation criteria. All of these findings highlight a novel mechanism where NPC2 by negatively regulating ERK 1/2 MAPK phosphorylation may efficiently suppress development of maladaptive tissue remodeling and inflammation.