Collagen gels are promising scaffolds to prepare an implant for cartilage repair but several parameters, such as collagen concentration and composition as well as cell density, should be carefully considered, as they are reported to affect phenotypic aspects of chondrocytes. In this study we investigated whether the presence of collagen type I or II in gel lattices affects matrix contraction and relative gene expression levels of matrix proteins, MMPs and the subsequent degradation of collagen by goat articular chondrocytes. Only floating collagen I gels, and not those attached or composed of type II collagen, contracted during a culture period of 12 days. This coincided with an upregulation of both Mmp13 and −14 gene expression, whereas Mmp1 expression was not affected. The release of hydroxyproline in the culture medium, indicating matrix degradation, was increased five-fold in contracted collagen I gels compared to collagen II gels without contraction. Furthermore, blocking contraction of collagen I gels by cytochalasin B inhibited Mmp13 and −14 expression and the release of hydroxyproline. The expression of cartilage-specific ECM genes was decreased in contracted collagen I gels, with increased numbers of cells with an elongated morphology, suggesting that matrix contraction induces dedifferentiation of chondrocytes into fibroblast-like cells. We conclude that the collagen composition of the gels affects matrix contraction by articular chondrocytes and that matrix contraction induces an increased Mmp13 and −14 expression as well as matrix degradation. Copyright © 2011 John Wiley & Sons, Ltd.