Background: It has been reported that the harvested hamstring tendon for autograft could be regenerated with well-oriented fibers and uniformly distributed spindle-shaped cells after removal. However, which cell type might participate in the repair process remains unknown. Purpose: To investigate the tenogenic differentiation potential of human muscle–derived cells (MDCs) both in vitro and in vivo. Study Design: Controlled laboratory study. Methods: Primary human MDCs and tenocytes were isolated from discarded materials during a peroneus longus tendon–harvesting procedure. Expression of tenogenic genes were evaluated and compared among MDCs, MDCs with tenogenic induction, and tenocytes. RNA sequencing was performed to evaluate the expression profile of differentiated MDCs. Human MDCs were implanted in a tendon injury model to investigate the in vivo tenogenic differentiation potential. Histologic and functional analyses were performed to evaluate the function of MDCs for tendon repair. Results: The relative expression levels (in fold change) of tenogenic genes Col I, MKX, SCX, THBS4, and TNC in MDCs were significantly upregulated 11.5 ± 1.3, 957.1 ± 63.7, 19.1 ± 2.8, 61.9 ± 4.8, and 10.2 ± 2.8 after tenogenic induction, respectively. The expression profile of tenogenically differentiated MDCs was much closer to primary tenocytes. Activation of TGF-β/Smad3 signaling significantly promoted the tenogenic differentiation ability of MDCs. Transplanted human MDCs were identified in regenerated tendon and expressed tenogenic genes. As for biomechanical properties, the failure loads in the Matrigel, transplantation, and uninjured groups were 7.2 ± 0.5, 11.6 ± 0.3, and 13.9 ± 0.7 N, while the stiffness values were 4.4 ± 1.3 × 103, 7.6 ± 0.8 × 103, and 10.9 ± 1.1 × 103 N/m. Plantarflexion force, histologic morphology, and motor function were also significantly improved after MDC transplantation in a tendon injury model. Conclusion: There exist cells with tenogenic differentiation potential in human skeletal muscles. Activation of TGF-β/Smad3 signaling plays an important role in tenogenic differentiation for human MDCs. Human MDCs contribute to structural and functional repair for the injured tendon. MDCs are a potential cell source to participate in the repair process after tendon injury. Clinical Relevance: The MDCs could be a promising cell source to repair tendon injury.