The biological mechanisms regulating tenocyte differentiation and morphological maturation have not been well-established, partly due to the lack of reliable in vitro systems that produce highly aligned collagenous tissues. In this study, we developed a scaffold-free, three-dimensional (3D) tendon culture system using mouse tendon cells in a differentially adherent growth channel. Transforming Growth Factor-β (TGFβ) signaling is involved in various biological processes in the tendon, regulating tendon cell fate, recruitment and maintenance of tenocytes, and matrix organization. This known function of TGFβ signaling in tendon prompted us to utilize TGFβ1 to induce tendon-like structures in 3D tendon constructs. TGFβ1 treatment promoted a tendon-like structure in the peripheral layer of the constructs characterized by increased thickness with a gradual decrease in cell density and highly aligned collagen matrix. TGFβ1 also enhanced cell proliferation, matrix production, and morphological maturation of cells in the peripheral layer compared to vehicle treatment. TGFβ1 treatment also induced early tenogenic differentiation and resulted in sufficient mechanical integrity, allowing biomechanical testing. The current study suggests that this scaffold-free 3D tendon cell culture system could be an in vitro platform to investigate underlying biological mechanisms that regulate tenogenic cell differentiation and matrix organization.