Pericytes ubiquitously surround capillaries and microvessels within vascularized tissues and have diverse functions after tissue injury. In addition to regulation of angiogenesis and tissue regeneration after injury, pericytes also contribute to organ fibrosis. Destabilization of the medial meniscus (DMM) phenocopies post-traumatic osteoarthritis, yet little is known regarding the impact of DMM surgery on knee joint-associated pericytes and their cellular descendants. Here, inducible platelet-derived growth factor receptor-β (PDGFRβ)-CreERT2 reporter mice were subjected to DMM surgery, and lineage tracing studies performed over an 8-week period. Results showed that at baseline PDGFRβ reporter activity highlights abluminal perivascular cells within synovial and infrapatellar fat pad (IFP) tissues. DMM induces a temporospatially patterned increase in vascular density within synovial and subsynovial tissues. Marked vasculogenesis within IFP was accompanied by expansion of PDGFRβ reporter+ perivascular cell numbers, detachment of mGFP+ descendants from vessel walls, and aberrant adoption of myofibroblastic markers among mGFP+ cells including α-SMA, ED-A, and TGF-β1. At later timepoints, fibrotic changes and vascular maturation occurred within subsynovial tissues, with the redistribution of PDGFRβ+ cellular descendants back to their perivascular niche. In sum, PDGFRβ lineage tracing allows for tracing of perivascular cell fate within the diarthrodial joint. Further, destabilization of the joint induces vascular and fibrogenic changes of the IFP accompanied by perivascular to myofibroblast transdifferentiation.