Mesenchymal stem cells (MSCs) are pluripotent cells that primarily differentiate into osteocytes, chondrocytes, and adipocytes. Recent studies indicate that MSCs can also be induced to generate tenocyte-like cells; moreover, MSCs have been suggested to have great therapeutic potential for tendon pathologies. Yet the precise molecular cascades governing tenogenic differentiation of MSCs remain unclear. We demonstrate scleraxis, a transcription factor critically involved in embryonic tendon development and formation, plays a pivotal role in the fate determination of MSC towards tenocyte differentiation. Using murine C3H10T1/2 pluripotent stem cells as a model system, we show scleraxis is extensively expressed in the early phase of bone morphogenetic protein (BMP)-12-triggered tenocytic differentiation. Once induced, scleraxis directly transactivates tendon lineage-related genes such as tenomodulin and suppresses osteogenic, chondrogenic, and adipogenic capabilities, thus committing C3H10T1/2 cells to differentiate into the specific tenocyte-like lineage, while eliminating plasticity for other lineages. We also reveal that mechanical loading-mediated tenocytic differentiation follows a similar pathway and that BMP-12 and cyclic uniaxial strain act in an additive fashion to augment the maximal response by activating signal transducer Smad8. These results provide critical insights into the determination of multipotent stem cells to the tenocyte lineage induced by both chemical and physical signals.