Chemokines are small cytokines primarily known for their roles in inflammation. More recently, however, they have been implicated in processes involved in development of the granulation tissue of wounds, but little is known about their functions during this process. Fibroblasts play key roles in this phase of healing: some fibroblasts differentiate into myofibroblasts, alpha-smooth muscle actin (SMA)-producing cells that are important in wound closure and contraction. Here we show that the CXC chemokine chicken chemotactic and angiogenic factor (cCAF) stimulates fibroblasts to produce high levels of alpha-SMA and to contract collagen gels more effectively than do normal fibroblasts, both characteristic properties of myofibroblasts. Specific inhibition of alpha-SMA expression resulted in abrogation of cCAF-induced contraction. Furthermore, application of cCAF to wounds in vivo increases the number of myofibroblasts present in the granulation tissue and accelerates wound closure and contraction. We also show that these effects in culture and in vivo can be achieved by a peptide containing the NH2-terminal 15 amino acids of the cCAF protein and that inhibition of alpha-SMA expression also results in inhibition of N-peptide-induced collagen gel contraction. We propose that chemokines are major contributors for the differentiation of fibroblasts into myofibroblasts during formation of the repair tissue. Because myofibroblasts are important in many pathological conditions, and because chemokines and their receptors are amenable to pharmacological manipulations, chemokine stimulation of myofibroblast differentiation may have implications for modulation of functions of these cells in vivo.