The progression of autosomal dominant polycystic kidney disease (ADPKD), an inherited kidney disease, is associated with renal interstitial inflammation and fibrosis. CD74 has been known not only as a receptor of macrophage migration inhibitory factor (MIF) it can also have MIF independent functions. In this study, we report unknown roles and function of CD74 in ADPKD. We show that knockout of CD74 delays cyst growth in Pkd1 mutant kidneys. Knockout and knockdown of CD74 (1) normalize PKD associated signaling pathways, including ERK, mTOR and Rb to decrease Pkd1 mutant renal epithelial cell proliferation, (2) decrease the activation of NF-κB and the expression of MCP-1 and TNF-alpha (TNF-α) which decreases the recruitment of macrophages in Pkd1 mutant kidneys, and (3) decrease renal fibrosis in Pkd1 mutant kidneys. We show for the first time that CD74 functions as a transcriptional factor to regulate the expression of fibrotic markers, including collagen I (Col I), fibronectin, and α-smooth muscle actin (α-SMA), through binding on their promoters. Interestingly, CD74 also regulates the transcription of MIF to form a positive feedback loop in that MIF binds with its receptor CD74 to regulate the activity of intracellular signaling pathways and CD74 increases the expression of MIF in ADPKD kidneys during cyst progression. We further show that knockout of MIF and targeting MIF with its inhibitor ISO-1 not only delay cyst growth but also ameliorate renal fibrosis through blocking the activation of renal fibroblasts and CD74 mediated the activation of TGF-β-Smad3 signaling, supporting the idea that CD74 is a key and novel upstream regulator of cyst growth and interstitial fibrosis. Thus, targeting MIF-CD74 axis is a novel therapeutic strategy for ADPKD treatment.