Flexor tendon healing is mediated by cell proliferation, migration, and extracellular matrix synthesis that contribute to the formation of scar tissue and adhesion. The biological mechanisms of flexor tendon adhesion formation have been linked to transforming growth factor β (TGF-β). To elucidate the cellular and molecular events in this pathology, we implanted live flexor digitorum longus grafts from the reporter mouse Rosa26(LacZ/+) in wild-type recipients, and used histological β-galactosidase (β-gal) staining to evaluate the intrinsic versus extrinsic cellular origins of scar, and reverse transcription-polymerase chain reaction to measure gene expression of TGF-β and its receptors, extracellular matrix proteins, and matrix metalloproteinases (MMPs) and their regulators. Over the course of healing, graft cellularity and β-gal activity progressively increased, and β-gal-positive cells migrated out of the Rosa26(LacZ/+) graft. In addition, there was an evidence of influx of host cells (β-gal-negative) into the gliding space and the graft, suggesting that both graft and host cells contribute to adhesions. Interestingly, we observed a biphasic pattern in which Tgfb1 expression was the highest in the early phases of healing and gradually decreased thereafter, whereas Tgfb3 increased and remained upregulated later. The expression of TGF-β receptors was also upregulated throughout the healing phases. In addition, type III collagen and fibronectin were upregulated during the proliferative phase of healing, confirming that murine flexor tendon heals by scar tissue. Furthermore, gene expression of MMPs showed a differential pattern in which inflammatory MMPs were the highest early and matrix MMPs increased over time. These findings offer important insights into the complex cellular and molecular factors during flexor tendon healing.