Abstract During tumor progression, cancer-associated fibroblasts (CAFs) accumulate in tumors and produce excessive extracellular matrix (ECM), forming a capsule that enwraps cancer cells. This capsule is a barrier that restricts tumor growth leading to the buildup of intratumoral pressure. Combining genetic and physical manipulations in vivo with microfabrication and force measurements in vitro , we found that the CAFs capsule is not a passive barrier but instead actively compresses cancer cells using actomyosin contractility. Cancer cells mechanosense CAF compression, resulting in an altered localization of the transcriptional regulator YAP. Abrogation of CAFs contractility in vivo leads to the dissipation of compressive forces and impairment of capsule formation. By mapping CAF force patterns in 3D, we show that compression is a CAF-intrinsic property independent of cancer cell growth. Supracellular coordination of CAFs is achieved through fibronectin cables that serve as scaffolds allowing force transmission. Our study unveils that the contractile capsule actively compresses cancer cells, modulates their mechanical signaling, and reorganizes tumor morphology.