Tendon injuries are common with poor healing potential. The paucity of therapies for tendon injuries is due to our limited understanding of the cells and molecular pathways that drive tendon regeneration. Using a mouse model of neonatal tendon regeneration, we identified TGFβ signaling as a major molecular pathway that drives neonatal tendon regeneration. Through targeted gene deletion, small molecule inhibition, and lineage tracing, we elucidated TGFβ-dependent and TGFβ-independent mechanisms underlying tendon regeneration. Importantly, functional recovery depended on canonical TGFβ signaling and loss of function is due to impaired tenogenic cell recruitment from both Scleraxis-lineage and non-Scleraxis-lineage sources. We show that TGFβ signaling is directly required in neonatal tenocytes for recruitment and that TGFβ ligand is positively regulated in tendons. Collectively, these results show a functional role for canonical TGFβ signaling in tendon regeneration and offer new insights toward the divergent cellular activities that distinguish regenerative vs fibrotic healing.