Many chronic diseases are associated with fibrotic deposition of Collagen and other matrix proteins. Little is known about the factors that determine preferential onset of fibrosis in particular tissues. Here we show that plasma membrane (PM) overgrowth causes pericellular Collagen accumulation in Drosophila adipocytes. We found that loss of Dynamin and other endocytic components causes pericellular trapping of outgoing Collagen IV due to dramatic cortex expansion when endocytic removal of PM is prevented. Deposits also form in the absence of negative Toll immune regulator Cactus, excess PM being caused in this case by increased secretion. Finally, we show that trimeric Collagen accumulation, downstream of Toll or endocytic defects, activates a tissue damage response. Our work indicates that traffic imbalances and PM topology may contribute to fibrosis. It also places fibrotic deposits both downstream and upstream of immune signaling, consistent with the chronic character of fibrotic diseases.