Intestinal fibroblasts (FB) play essential roles in intestinal homeostasis. Here we show that the small and large intestinal lamina propria (LP) contain similar FB subsets that locate in specific anatomical niches and express distinct arrays of epithelial support genes. However, there were tissue specific differences in the transcriptional profile of intestinal FB subsets in the two sites. All adult intestinal LP mesenchymal stromal cells (MSC), including FB, smooth muscle cells (SMC) and pericytes derive from Gli1-expressing embryonic precursors which we identify as mesothelial cells. Trajectory analysis suggested that adult SMC and FB derive from distinct embryonic intermediates, and that adult FB subsets develop in a linear trajectory from CD81+ FB. Finally, we show that colonic subepithelial PDGFRαhi FB comprise several functionally and anatomically distinct populations that originate from an Fgfr2-expressing FB intermediate. Collectively our results provide novel insights into MSC diversity, location, function and ontogeny, with implications for our understanding of intestinal development, homeostasis and disease.