Cells sense the extracellular environment and mechanical stimuli and translate these signals into intracellular responses through mechanotransduction, which alters cell maintenance, proliferation, and differentiation. Here we use a mouse model of trauma-induced heterotopic ossification (HO) to examine how cell-extrinsic forces impact mesenchymal progenitor cell (MPC) fate. After injury, single-cell (sc) RNA sequencing of the injury site reveals an early increase in MPC genes associated with pathways of cell adhesion and ECM-receptor interactions, and MPC trajectories to cartilage and bone. Immunostaining uncovers active mechanotransduction after injury with increased focal adhesion kinase signaling and nuclear translocation of transcriptional coactivator TAZ, inhibition of which mitigates HO. Similarly, joint immobilization decreases mechanotransductive signaling, and completely inhibits HO. Joint immobilization decreases collagen alignment and increases adipogenesis. Further, scRNA sequencing of the HO site after injury with or without immobilization identifies gene signatures in mobile MPCs correlating with osteogenesis, and signatures from immobile MPCs with adipogenesis. scATAC-seq in these same MPCs confirm that in mobile MPCs, chromatin regions around osteogenic genes are open, whereas in immobile MPCs, regions around adipogenic genes are open. Together these data suggest that joint immobilization after injury results in decreased ECM alignment, altered MPC mechanotransduction, and changes in genomic architecture favoring adipogenesis over osteogenesis, resulting in decreased formation of HO.