The myofibroblast is responsible for the generation of contractile force associated with wound contraction and pathological contractures and is characterized by the presence of alpha-smooth muscle (alpha-sm) actin-containing stress fibers, vinculin-containing fibronexus adhesion complexes, and fibronectin fibrils containing the ED-A splice variant. Transforming growth factor-beta1 (TGF-beta1) can promote the expression of alpha-sm actin in myofibroblasts, but the functional significance of this increased expression is unclear. In this study, we demonstrate, using the stress-relaxed collagen lattice contraction assay, that TGF-beta1 promoted a dose-dependent increase in the generation of contractile force in myofibroblasts and a concomitant increase in the expression of alpha-sm actin. We also demonstrate that TGF-beta1 enhanced the formation of the structural elements important in myofibroblast contractile force generation and transmission, including stress fibers, vinculin-containing fibronexus adhesion complexes, and fibronectin fibrils, and that this enhancement occurred prior to, and independent of, alpha-sm actin expression. This differentiated myofibroblast phenotype was not stable. Removal of TGF-beta1 resulted in reduced expression of alpha-sm actin as well as a decreased assembly of stress fibers and vinculin-containing adhesion complexes; however, there was no reduction in fibronectin fibrils. We conclude that TGF-beta1 promotes the morphological and functional differentiation of the myofibroblast by first enhancing the formation of the structural elements characteristic of the myofibroblast followed by increased expression of alpha-sm actin and contractile force generation.