Objectives: Chronic rotator cuff tears still represent a significant source of morbidity and functional decline in the general population. The purpose of this study was to establish protocols for isolation and expansion of bursa-derived mesenchymal stem cells (BDSCs) and to evaluate their differentiation capacity, including tenogenesis. We hypothesized that BDSCs would be capable of multilineage differentiation (including tenogenesis) and represent an important source for autologous stem cells for patients undergoing rotator cuff repair. Methods: After IRB approval, 10 patients (ages 43-65 years) scheduled to undergo arthroscopic repair for chronic rotator cuff tears were enrolled. During diagnostic arthroscopy, subacromial bursa tissue was harvested using an arthroscopic shaver and collected by attaching the outflow tubing to a specialized specimen cup. Tissue specimens were transported to our laboratory for analysis. BDSCs were isolated via adherent culture and plated in Dulbecco’s Modified Eagle’s Medium (DMEM) supplemented with 10% Fetal Bovine Serum (FBS). Chondrogenic, adipogenic, and osteogenic induction media were used to induce differentiation. Tenogenic induction was performed using DMEM supplemented with varying concentrations of BMP-12, ascorbic acid, and human tenocyte-conditioned media. Alcian Blue staining was used to evaluate chondrogenesis, Oil Red O staining for adipogenesis, and Alkaline Phosphatase staining for osteogenesis. Gene expression markers for adipogenesis (ADIPOQ, FABP4, PPARγ), chondrogenesis (COL2A1 and SOX5), and osteogenesis (osteocalcin, osterix), along with primary antibodies to tenogenic markers (scleraxis, tenomodulin), were used to verify each cell lineage. Results: BDSCs isolated by adherent culture without collagen exhibited a spindle-shaped morphology characteristic of mesenchymal stem cells (MSCs), formed colonies, and demonstrated great expandability for six to eight passages without morphology changes (Figure 1A). After 3 weeks of culture, 95% (p<0.0001) of the BDSCs expressed the MSC surface marker CD90 and were negative for non-MSC cell markers (CD45, CD146, CD31, and CD34) (Figure 1B and C). These BDSCs demonstrated a capacity for adipogenesis (positive Oil Red O staining, ADIPOQ, FABP4, PPARγ expression), osteogenesis (positive alkaline phosphatase staining, positive osteocalcin and scleraxis expression), chondrogenesis (positive Alcian Blue staining, positive COL2A1 and SOX5 expression), and tenogenesis (scleraxis and tenomodulin expression) (Figure 2). The results indicate that BDSCs are multipotent as evidenced by their differentiation into fat, bone, cartilage, and tendon cells. For tenogenesis, we found that 7-day incubation in DMEM supplemented with 100 ng/mL of BMP-12 and 50 μg/mL of ascorbic acid produced superior tenogenic induction. These BDSCs adapted an elongated morphology combined with the expression of both scleraxis and tenomodulin - a unique characteristic of native tenocytes. Conclusion: Our results demonstrate that subacromial bursa represents a viable source of mesenchymal stem cells. We developed a reliable protocol for isolation of BDSCs from patient bursa samples. We show that BDSCs in the presence of BMP-12 and ascorbic acid can differentiate toward a tenogenic lineage. Our work provides strong evidence that BDSCs may be a potent tool for cellular therapy and may benefit future patients who undergo surgical repair of chronic rotator cuff tears. [Figure: see text][Figure: see text]