In horses and humans, tendon injuries are a significant problem. Not only can they occur in both athletes and nonathletes, they require lengthy periods of recuperation and undergo poor natural regeneration, which leads to high reinjury rates. Embryonic stem cells (ESCs) may provide a renewable source of allogeneic cells to use in clinical applications to aid tissue regeneration. Equine ESCs can undergo tenocyte differentiation in vivo and in vitro, but the immune properties of tenocytes isolated from either ESCs or tissues have not previously been characterized. Here, we demonstrate that equine tenocytes derived from fetal and adult tendon tissue and ESCs express robust levels of major histocompatibility complex (MHC) I but no MHC II in response to inflammatory cytokine interferon gamma (IFNγ). However, MHC expression does not affect their allorecognition by peripheral blood mononuclear cells in vitro. Adult and fetal tenocytes remain immune privileged and strongly immune suppressive in both the presence and absence of exogenously applied IFNγ. In contrast, ESC-derived tenocytes are immune privileged even in the presence of IFNγ, but they are only weakly immune suppressive in the presence but not in the absence of exogenously applied IFNγ. This is despite ESC-tenocytes expressing a number of genes involved in immune modulation at significantly higher levels than those expressed by adult and fetal tenocytes when in standard, nonstimulated monolayer culture. Together, this work suggests that, similar to other fibroblasts, tenocytes have immune modulatory properties, and that culture-expanded tenocytes derived from primary tissues or ESCs may be safe to use in clinical transplantations to injured tendons of unrelated animals.