The role of intrinsic and extrinsic healing in injured tendons is still debated. In this study, we characterized cell plasticity, proliferative capacity, and migration characteristics as proxy measures of healing potential in cells derived from the peritenon (extrinsic healing) and compared these to cells from the tendon core (intrinsic healing). Both cell populations were extracted from horse superficial digital flexor tendon and characterized for tenogenic and matrix remodeling markers as well as for rates of migration and replication. Furthermore, colony-forming unit assays, multipotency assays, and real-time quantitative polymerase chain reaction analyses of markers of osteogenic and adipogenic differentiation after culture in induction media were performed. Finally, cellular capacity for differentiation towards a myofibroblastic phenotype was assessed. Our results demonstrate that both tendon- and peritenon-derived cell populations are capable of adipogenic and osteogenic differentiation, with higher expression of progenitor cell markers in peritenon cells. Cells from the peritenon also migrated faster, replicate more quickly, and show higher differentiation potential toward a myofibroblastic phenotype when compared to cells from the tendon core. Based on these data, we suggest that cells from the peritenon have substantial potential to influence tendon-healing outcome, warranting further scrutiny of their role.