Roller chain drives are frequently applied in a variety of machinery for mechanical motion and power transmission. The roller engagement location on the sprocket tooth contour and the resulted contact behavior is governed by the wear of components and pretension of the chain. Therefore, the influence of extension of chain resulted from wear and pretension of chain on contact behavior was investigated numerically using explicit dynamics module of ABAQUS software. The contact angles evaluated from the numerical simulation were assessed relative to those obtained from the basic rigid body analytical formulation. The chain elongation of 3% increased the maximum contact force up to 52% during engagement with the driver sprocket. The contact force raised to 400% when the pretension in the chain drive was increased from 200 to 1000 N, leaving the force distribution pattern unaltered. The optimal design of a steel sprocket is realized through equivalent static finite element contact analysis of a sprocket engaged with 3% extended roller chain. The dynamic finite element analysis in conjunction with topology optimization reduced the weight of the sprocket by 24%.