Flexor tendon injuries are among the most challenging problems for hand surgeons and tissue engineers alike. Not only do flexor tendon injuries heal with poor mechanical strength, they can also form debilitating adhesions that may permanently impair hand function. While TGF-β1 is a necessary factor for regaining tendon strength, it is associated with scar and adhesion formation in the flexor tendons and other tissues as well as fibrotic diseases. The pleiotropic effects of TGF-β1 on tendon cells and tissue have not been characterized in detail. The goal of the present study was to identify the targets through which the effects of TGF-β1 on tendon healing could be altered. To accomplish this, we treated flexor tendon tenocytes cultured in pinned collagen gels with 1, 10 or 100 ng/mL of TGF-β1 and measured gel contraction and gene expression using RT-PCR up to 48 hours after treatment. Specifically, we studied the effects of TGF-β1 on the expression of collagens, fibronectin, proteoglycans, MMPs, MMP inhibitors, and the neotendon transcription factors, Scleraxis and Mohawk. Area contraction of the gels was not dose-dependent with the TGF-β1 concentrations tested. We observed dose-dependent downregulation of MMP-16 (MT3-MMP) and decorin, and upregulation of biglycan, collagen V, collagen XII, PAI-1, Scleraxis, and Mohawk by TGF-β1. Inter-gene analyses were also performed to further characterize the expression of ECM and MMP genes in the tenocyte-seeded collagen gels. These analyses illustrate that TGF-β1 tilts the balance of gene expression in favor of ECM synthesis rather than the matrix-remodeling MMPs, a possible means by which TGF-β1 promotes adhesion formation.