Single-mode (SM) vertical-cavity surface-emitting lasers (VCSELs), especially those operating around 850 nm, have been studied intensively in recent years for short distance transmission. Despite the demonstrations of increased data rate and system distance, the impact of frequency chirp that is commonly present in directly modulated lasers is an area that needs more detailed studies for 850 nm VCSEL-based systems. In this paper, we explore the interaction between a laser chirp and fiber chromatic dispersion using an 850-nm SM VCSEL over a standard SM fiber that is two-mode at the operating wavelength. Our transmission experiments show that the system can enjoy a benefit from negative fiber dispersion instead of a penalty compared to the back-to-back case, due to the favorable chirp–dispersion interaction, which is also supported by our system bandwidth measurements. Furthermore, we measure the chirp value of the SM VCSEL and conduct modeling using the time-domain pulse concept to illustrate the impact on the chirp–dispersion interaction and explore the optimal chirp parameters for different transmission data rates. Our study indicates a significant system benefit of using 850-nm SM VCSELs with a high bandwidth single-mode fiber around 850 nm due to the favorable chirp–dispersion interaction. Such a benefit can enable high data rate and longer distance system transmission for modern data center applications.