Adipose-derived stromal cells (ASCs) are pluripotent cells that have the capacity to differentiate into tendon fibroblasts (TFs). They are abundant in adults, easy to access, and are therefore an ideal cell source for tendon tissue engineering. Despite this potential, the molecular cues necessary for tenogenic differentiation of ASCs are unknown. Unlike other bone morphogenetic proteins (BMPs), BMP12, BMP13, and BMP14 have been reported to be less osteo-chondrogenic and to induce tendon rather than bone formation in vivo. This study investigated the effects of BMP12 and BMP14 on ASC differentiation in vitro. In canine ASCs, BMP12 effectively increased the expression of the tendon markers scleraxis and tenomodulin at both mRNA and protein levels. Consistent with these results, BMP12 induced scleraxis promoter driven-GFP and tenomodulin protein expression in mouse ASCs. Although BMP12 also enhanced the expression of the cartilage matrix gene aggrecan in ASCs, the resulting levels remained considerably lower than those detected in tendon fibroblasts. In addition, BMP12 reduced expression of the bone marker osteocalcin, but not the osteogenic transcription factor runx-2. BMP14 exhibited similar, but marginally less potent and selective effects, compared to BMP12. BMPs are known to signal through the canonical Smad pathway and the non-canonical mitogen-activated protein kinase (MAPK) pathway. BMP12 triggered robust phosphorylation of Smad1/5/8 but not Smad2/3 or p38 MAPK in ASCs. The effect was likely conveyed by type I receptors ALK2/3/6, as phosphorylation of Smad1/5/8 was blocked by the ALK2/3/6 inhibitor LDN-193189 but not by the ALK4/5/7 inhibitor SB-505124. Moreover, ALK6 was found to be the most abundant type I receptor in ASCs, with mRNA expression 100 to 10,000 times that of any other type I receptor. Collectively, results support the conclusion that BMP12 induces tenogenic differentiation of ASCs via the Smad1/5/8 pathway.