This review offered a comprehensive analysis of tendon and ligament injuries, emphasizing the crucial role of tendon-derived stem cells (TDSCs) in tissue engineering as a potential solution for these challenging medical conditions. Tendon and ligament injuries, prevalent among athletes, the elderly, and laborers, often result in long-term disability and reduced quality of life due to the poor intrinsic healing capacity of these avascular structures. The formation of biomechanically inferior scar tissue and a high rate of reinjury underscore the need for innovative approaches to enhance and guide the regenerative process. This review delved into the complexities of tendon and ligament structure and function, types of injuries and their impacts, and the limitations of the natural repair process. It particularly focused on the role of TDSCs within the context of tissue engineering. TDSCs, with their ability to differentiate into tenocytes, are explored in various applications, including biocompatible scaffolds for cell tracking, co-culture systems to optimize tendon-bone healing, and graft healing techniques. The review also addressed the challenges of immunoreactivity post-transplantation, the importance of pre-treating TDSCs, and the potential of hydrogels and decellularized matrices in supporting tendon regeneration. It concluded by highlighting the essential roles of mechanical and molecular stimuli in TDSC differentiation and the current challenges in the field, paving the way for future research directions.