Tenomodulin (TeM) is a type II transmembrane glycoprotein containing a C-terminal anti-angiogenic domain and is predominantly expressed in tendons and ligaments. Here we report that TeM expression is closely associated with the appearance of tenocytes during chick development and is positively regulated by Scleraxis (Scx). At stage 23, when Scx expression in the syndetome has extended to the tail region, TeM was detectable in the anterior eight somites. At stage 25, TeM and Scx were both detectable in the regions adjacent to the myotome. Double positive domains for these genes were flanked by a dorsal TeM single positive and a ventral Scx single positive domain. At stage 28, the expression profile of TeM in the axial tendons displayed more distinct morphological features at different levels of the vertebrae. At stage 32 and later, Scx and TeM showed similar expression profiles in developing tendons. Retroviral expression of Scx resulted in the significant upregulation of TeM in cultured tenocytes, but not in chondrocytes. In addition, the misexpression of RCAS-cScx by electroporation into the hindlimb could not induce the generation of additional tendons, but did result in the upregulation of TeM expression in the tendons at stage 33 and later. These findings suggest that TeM is a late marker of tendon formation and that Scx positively regulates TeM expression in a tendon cell lineage-dependent manner.