import flash.text.TextField;
 
function scaleTextToFitInTextField( txt : TextField ):void
{  
     var f:TextFormat = txt.getTextFormat();
     f.size = ( txt.width > txt.height ) ? txt.width : txt.height;
     txt.setTextFormat( f );
 
     while ( txt.textWidth > txt.width - 4 || txt.textHeight > txt.height - 6 ) 
     {    
          f.size = int( f.size ) - 1;    
          txt.setTextFormat( f );  
     }
}
 
function scaleTextFieldToFitText( txt : TextField ) : void
{
     //the 4s take into account Flash's default padding.
     //If I omit them, edges of character get cut off.
     txt.width = txt.textWidth + 4;
     txt.height = txt.textHeight + 4;
}
 
 
//demo
var tf : TextField = new TextField();
addChild( tf );
tf.border = true;
tf.width = Math.random() * 400 + 30;
tf.height = Math.random() * 400 + 30;
tf.text = "hello there";
scaleTextToFitInTextField( tf );
scaleTextFieldToFitText( tf );