Cardiac myofibroblasts play an important role in myocardial remodeling. Although α-smooth muscle actin (α-SMA) expression is the hallmark of mature myofibroblasts, its role in regulating fibroblast function remains poorly understood. We explore the effects of the matrix environment in modulating cardiac fibroblast phenotype, and we investigate the role of α-SMA in fibroblast function using loss- and gain-of-function approaches. In murine myocardial infarction, infiltration of the infarct border zone with abundant α-SMA-positive myofibroblasts was associated with scar contraction. Isolated cardiac fibroblasts cultured in plates showed high α-SMA expression localized in stress fibers, exhibited activation of focal adhesion kinase (FAK), and synthesized large amounts of extracellular matrix proteins. In contrast, when these cells were cultured in collagen lattices, they exhibited marked reduction of α-SMA expression, negligible FAK activation, attenuated collagen synthesis, and increased transcription of genes associated with matrix metabolism. Transforming Growth Factor-β1-mediated contraction of fibroblast-populated collagen pads was associated with accentuated α-SMA synthesis. In contrast, serum- and basic Fibroblast Growth Factor-induced collagen pad contraction was associated with reduced α-SMA expression. α-SMA siRNA knockdown attenuated contraction of collagen pads populated with serum-stimulated cells. Surprisingly, α-SMA overexpression also reduced collagen pad contraction, suggesting that α-SMA is not sufficient to promote contraction of the matrix. Reduced contraction by α-SMA-overexpressing cells was associated with attenuated proliferative activity, in the absence of any effects on apoptosis. α-SMA may be implicated in contraction and remodeling of the extracellular matrix, but is not sufficient to induce contraction. α-SMA expression may modulate cellular functions, beyond its effects on contractility.