Tendons and ligaments are often affected by mechanical injuries or chronic impairment but other than muscle or bone they possess a low healing capacity. So far, little is known about regeneration of tendons and the role of tendon precursor cells in that process. We hypothesize that perivascular cells of tendon capillaries are progenitors for functional tendon cells and are characterized by expression of marker genes and proteins typical for mesenchymal stem cells and functional tendon cells. Immunohistochemical characterization of biopsies derived from intact human supraspinatus tendons was performed. From these biopsies perivascular cells were isolated, cultured, and characterized using RT-PCR and Western blotting. We have shown for the first time that perivascular cells within tendon tissue express both tendon- and stem/precursor cell-like characteristics. These findings were confirmed by results from in vitro studies focusing on cultured perivascular cells isolated from human supraspinatus tendon biopsies. The results suggest that the perivascular niche may be considered a source for tendon precursor cells. This study provides further information about the molecular nature and localization of tendon precursor cells, which is the basis for developing novel strategies towards tendon healing and facilitated regeneration.