We investigated the spatial distribution of stem cells in tendons and the roles of stem cells in early tendon repair. The relationship between tendon-derived stem cells (TDSCs) isolated in vitro and tendon stem cells in vivo was also explored. Iododeoxyuridine (IdU) label-retaining method was used for labeling stem cells in rat patellar tendons with and without injury. Co-localization of label-retaining cells (LRCs) with different markers was done by immunofluorescent staining. TDSCs were isolated from patellar tendon mid-substance after IdU pulsing, and the expression of different markers in fresh and expanded cells was done by immunofluorescent staining. More LRCs were found at the peritenon and tendon-bone junction compared with the mid-substance. Some LRCs at the peritenon were located at the perivascular niche. The LRC number and the expression of proliferative, tendon-related, pluripotency, and pericyte-related markers in LRCs in the window wound increased. Most of the freshly isolated TDSCs expressed IdU, and some TDSCs expressed pericyte-related markers, which were lost during expansion. Both freshly isolated and subcultured TDSCs expressed pluripotency markers, which were absent in LRCs in intact tendons. In conclusion, we identified LRCs at the peritenon, mid-substance, and tendon-bone junction. There were both vascular and non-vascular sources of LRCs at the peritenon, while the source of LRCs at the mid-substance was non-vascular. LRCs participated in tendon repair via migration, proliferation, activation for tenogenesis, and increased pluripotency. Some LRCs in the window wound were pericyte like. Most of the mid-substance TDSCs were LRCs. The pluripotency markers and pericyte-related marker in LRCs might be important for function after injury. Recently, stem/progenitor cells have been isolated from tendon tissues of varies species, including human, horse, rabbit, rat, and mouse [3][4][5][6]. These stem/progenitor cells isolated from tendon tissues exhibited self-renewal and multilineage differentiation potential [3][4][5][6]. Since the origin and identity of these cells were not clear, we called them tendon-derived stem cells (TDSCs) to indicate only the tissue from which the cells were isolated [5].Many studies suggested that the wall of capillaries, small vessels, and large vessels harbored stem/progenitor cells [7][8][9][10][11]. Some studies further suggested that mesenchymal stem cells (MSCs) were derived from pericytes [9,12].Pericytes/perivascular cells from a variety of tissues were reported to exhibit characteristics that were strikingly similar to those of MSCs [7][8][9][10][11]. For tendons, there was also evidence that the vasculature of tendon tissue might harbor stem cells [13]. However, tendon mid-substance is hypovascular compared with other tissues and receives its blood supply mainly from the endotenon and paratenon [14]. TDSCs isolated from the tendon mid-substance, while positive for alpha smooth muscle actin [5], were not positive for other pericyte-related markers [3,15]. Tend...