Cells constantly probe their surrounding microenvironment by pushing and pulling on the extracellular matrix (ECM). While it is widely accepted that cell induced traction forces at the cell-matrix interface play essential roles in cell signaling, cell migration and tissue morphogenesis, a number of puzzling questions remain with respect to mechanosensing in cell-substrate interactions. Here we show that these open questions can be addressed by modeling the cell-substrate system as a pre-strained elastic disk attached to an elastic substrate via molecular bonds at the interface. Based on this model, we establish analytical and numerical solutions for the displacement and stress fields in both cell and substrate, as well as traction forces at the cell-substrate interface. We show that the cell traction generally increases with distance away from the cell center and that the traction-distance relationship changes from linear on soft substrates to exponential on stiff substrates. These results indicate that cell adhesion and migration behaviors can be regulated by cell shape and substrate stiffness. Our analysis also reveals that the cell traction increases linearly with substrate stiffness on soft substrates but then levels off to a constant value on stiff substrates. This biphasic behavior in the dependence of cell traction on substrate stiffness immediately sheds light on an existing debate on whether cells sense mechanical force or deformation when interacting with their surroundings. Finally, it is shown that the cell induced deformation field decays exponentially with distance away from the cell. The characteristic length of this decay is comparable to the cell size and provides a quantitative measure of how far cells feel into the ECM.