To evaluate whether Palmitoyl-pentapeptide (Pal-KTTKS), a lipidated subfragment of type 1 pro-collagen (residues 212-216), plays a role in fibroblast contractility, the effect of Pal-KTTKS on the expression of pro-fibrotic mediators in hypertropic scarring were investigated in relation with trans-differentiation of fibroblast to myofibroblast, an icon of scar formation. α-SMA was visualized by immunofluorescence confocal microscopy with a Cy-3-conjugated monoclonal antibody. The extent of α-SMA-positive fibroblasts was determined in collagen lattices and in cell culture study. Pal-KTTKS (0-0.5 µM) induced CTGF and α-SMA protein levels were determined by western blot analysis and fibroblast contractility was assessed in three-dimensional collagen lattice contraction assay. In confocal analysis, fibroblasts were observed as elongated and spindle shapes while myofibroblast observed as squamous, enlarged cells with pronounced stress fibers. Without Pal-KTTKS treatment, three quarters of the fibroblasts differentiates into the myofibroblast; α-SMA-positive stress fibers per field decreased twofold with 0.1 µM Pal-KTTKS treatment (75 ± 7.1 vs 38.6 ± 16.1%, n = 3,  < 0.05). The inhibitory effect was not significant in 0.5 µM Pal-KTTKS treatment. Stress fiber level and collagen contractility correlates with α-SMA expression level. In conclusion, Pal-KTTKS (0.1 µM) reduces α-SMA expression and trans-differentiation of fibroblasts to myofibroblast. The degree of reduction is dose-dependent. An abundance of myofibroblast and fibrotic scarring is correlated with excessive levels of α-SMA and collagen contractility. Delicate balance between the wound healing properties and pro-fibrotic abilities of pentapeptide KTTKS should be considered for selecting therapeutic dose for scar prevention.