Tendon injuries are very common in occupational and athletic settings, and the elderly population. Tendons repair and regenerate slowly and inefficiently in vivo after injury. The limited ability of tendons to self-repair and the general inefficiency of current treatment strategies have intensified the need for an effective therapeutic approach. Tendon-derived stem cells (TDSCs) have recently been identified within tendon tissues. TDSCs exhibit universal stem cell characteristics, such as clonogenicity, a high proliferative capacity, multi-differentiation potential, nonimmunogenicity, and immunosuppression. As a result, implanting TDSCs at damaged sites within tendons may be an effective way for tendon regeneration. This review summarizes the properties of TDSCs and discusses the advantages of its use in tendon tissue engineering.