Получил работу, изменив отступ и ширину.
JSFiddle: http://jsfiddle.net/tuybk748/1/
<div class='label gray'>+
</div><!-- must be connected to prevent gap --><div class='contents-wrapper'>
<div class="gray contents">These are the contents of this div</div>
</div>
.gray {
background: #ddd;
}
.contents-wrapper, .label, .contents {
display: inline-block;
}
.label, .contents {
overflow: hidden; /* must be on both divs to prevent dropdown behavior */
height: 20px;
}
.label {
padding: 10px 10px 15px;
}
.contents {
padding: 10px 0px 15px; /* no left-right padding at beginning */
white-space: nowrap; /* keeps text all on same line */
width: 0%;
-webkit-transition: width 1s ease-in-out, padding-left 1s ease-in-out,
padding-right 1s ease-in-out;
-moz-transition: width 1s ease-in-out, padding-left 1s ease-in-out,
padding-right 1s ease-in-out;
-o-transition: width 1s ease-in-out, padding-left 1s ease-in-out,
padding-right 1s ease-in-out;
transition: width 1s ease-in-out, padding-left 1s ease-in-out,
padding-right 1s ease-in-out;
}
.label:hover + .contents-wrapper .contents {
width: 100%;
padding-left: 10px;
padding-right: 10px;
}