Abnormal wound healing encompasses a wide spectrum, from chronic wounds to hypertrophic scars. Both conditions are associated with an abnormal cytokine profile in the wound bed. In this study, we sought to understand the dynamic relationships between myofibroblast differentiation and mechanical performance of the collagen matrix under tissue growth factor-beta (TGF-beta) and tumor necrosis factor-alpha (TNF-alpha) stimulation. We found TGF-beta increased alpha-smooth muscle actin (alpha-SMA) and TNF-alpha alone decreased the basal alpha-SMA expression. When TGF-beta1 and TNF-alpha were both added, the alpha-SMA expression was suppressed below the baseline. Real-time PCR showed that TNF-alpha suppresses TGF-beta1-induced myofibroblast (fibroproliferative) phenotypic genes, for example, alpha-SMA, collagen type 1A, and fibronectin at the mRNA level. TNF-alpha suppresses TGF-beta1-induced gene expression by affecting its mRNA stability. Our results further showed that TNF-alpha inhibits TGF-beta1-induced Smad-3 phosphorylation via Jun N-terminal kinase signaling. Mechanical testing showed that TNF-alpha decreases the stiffness and contraction of the lattices after 5 days in culture. We proposed that changes in alpha-SMA, collagen, and fibronectin expression result in decreased contraction and stiffness of collagen matrices. Therefore, the balance of cytokines in a wound defines the mechanical properties of the extracellular matrix and optimal wound healing.