The spatiotemporal interaction and constant iterative feedback between fibroblasts, extracellular matrix, and environmental cues are central for investigating the fibroblast-induced musculoskeletal tissue regeneration and fibroblast-to-myofibroblast transition (FMT). In this study, we created a fibroblast-laden 3D tissue analogue to study (1) how mechanical loading exerted on three-dimensional (3D) tissues affected the residing fibroblast phenotype and (2) to identify the ideal mechanical strain amplitude for promoting tissue regeneration without initiating myofibroblast differentiation. We applied uniaxial tensile strain (0, 4, 8, and 12%) to the cell-laden 3D tissue analogues to understand the interrelation between the degree of applied mechanical loading amplitudes and FMT. Our data demonstrated that 4% mechanical strain created an anabolic effect toward tissue regeneration, but higher strain amplitudes over-stimulated the cells and initiated fibrotic tissue formation. Under increased mechanical strain amplitudes, fibroblasts were activated from a homeostatic state to a proto-myofibroblast state which resulted in increased cellularity accompanied by increased expressions of extracellular matrix (ECM) components, activation stressors (TGF-β1 and TGF-βR1), and profibrotic markers. This further transformed fibroblasts into α-smooth muscle actin expressing myofibroblasts. Understanding the interplay between the applied degree of mechanical loading exerted on 3D tissues and residing fibroblast phenotypic response is important to identify specific mechanomodulatory approaches for tissue regeneration and the informed mechanotherapy-guided tissue healing strategies.