Effective targeting of cancer-associated fibroblasts (CAFs) is hindered by the lack of specific biomarkers and a poor understanding of the mechanisms by which different populations of CAFs contribute to cancer progression. While the role of TGFβ in CAFs is well-studied, less attention has been focused on a structurally and functionally similar protein, Activin A (encoded by INHBA). Here, we identified INHBA(+) CAFs as key players in tumor promotion and immunosuppression. Spatiotemporal analyses of patient-matched primary, metastatic, and recurrent ovarian carcinomas revealed that aggressive metastatic tumors enriched in INHBA(+) CAFs were also enriched in regulatory T cells (Tregs). In ovarian cancer mouse models, intraperitoneal injection of the Activin A neutralizing antibody attenuated tumor progression and infiltration with pro-tumorigenic subsets of myofibroblasts and macrophages. Downregulation of INHBA in human ovarian CAFs inhibited pro-tumorigenic CAF functions. Co-culture of human ovarian CAFs and T cells revealed the dependence of Treg differentiation on direct contact with INHBA(+) CAFs. Mechanistically, INHBA/recombinant Activin A in CAFs induced the autocrine expression of PD-L1 through SMAD2-dependent signaling, which promoted Treg differentiation. Collectively, our study identified an INHBA(+) subset of immunomodulatory pro-tumoral CAFs as a potential therapeutic target in advanced ovarian cancers which typically show a poor response to immunotherapy.