Ordinary cement concrete and mortar have such weakness as significant drying shrinkage, low strength and inferior extensibility, and thus they easily cause shrinkage cracks. It has already been known well that the steel fiber reinforcement of the concrete and mortar is very effective to the reduction of their drying shrinkage. Recently, surfactant-type shrinkage-reducing agents for the concrete and mortar have been developed in Japan. However, the composite effects of steel fiber reinforcement and shrinkage-reducing agent modification on the concrete and mortar have not yet been reported. The purpose of this study is to make clear the drying shrinkage reduction of steel fiber reinforced mortar containing a shrinkage-reducing agent. Steel fiber reinforced mortars with a shrinkage-reducing agent are prepared with variations of shrinkage-reducing agent and steel fiber contents, and tested for drying shrinkage and strength. The conclusions obtained from the test results are summarized as follows: (1) The drying shrinkage of the mortars is greatly reduced with increasing shrinkage-reducing agent and steel fiber contents, and becomes approximately one-half of that of ordinary mortar (without the steel fibers and shrinkage-reducing agent), (2) The drying shrinkage can be predicted as a function of the shrinkage-reducing agent and steel fiber contents and water-cement ratio, and (3) The addition of the shrinkage-reducing agent to the mortars does not deteriorate their strength.