Autologous tendon grafts are used for meniscal reconstruction of surgically removed knee joint meniscus. However, as meniscal reconstruction cannot prevent the progression of cartilage degeneration, additional procedures that confer meniscus-like histological properties to the transplanted tendon are required for improved outcomes. Parathyroid hormone (PTH)(1-34) induces cartilage formation in the rat tendon, and transplantation of PTH-treated tendon promotes meniscal regeneration. Controlled laboratory study. Rat Achilles tendon-derived cells were cultured with or without PTH for 28 days and stained with Alcian blue to determine chondrogenic differentiation. After 14 and 28 days of incubation, gene expression was assessed using quantitative real-time polymerase chain reaction. In an in vivo study, rat Achilles tendon was injected with PTH and then transplanted onto a medial meniscal defect. Macroscopic and histological assessments of the regenerated meniscus and of cartilage degeneration in the tibial plateau were performed at 4 and 8 weeks after surgery. In vitro, PTH-treated cells showed better staining with Alcian blue than the control (normal medium) group. PTH1R, Col2a1, Sox9, and RUNX2 were significantly upregulated in PTH-treated cells (P < .05). Macroscopically, the in vivo results revealed more prominent meniscal coverage and lesser progression of articular cartilage degeneration in the PTH group than in the phosphate-buffered saline-injected group. Histologically, toluidine blue staining revealed metachromasia in the PTH-injected tissue at 4 and 8 weeks. The PTH-treated regenerated meniscus showed positive immunostaining for type II collagen in the area exhibiting metachromasia. Moreover, PTH-treated tendon had an enhanced histological score compared with the untreated group at 4 and 8 weeks (P < .05). PTH(1-34) induced cartilage formation in the rat tendon. Transplantation of PTH(1-34)-treated Achilles tendon in a rat meniscal defect model induced meniscal regeneration and preserved knee articular cartilage. Macroscopically, PTH groups showed a greater coverage of the regenerated meniscus. Histologically, the regenerated meniscus had higher cartilaginous matrix content in rats transplanted with PTH-treated tendons. PTH(1-34) stimulated tendon-derived cells to promote chondrogenic differentiation. Meniscal transplantation using PTH-injected autologous tendon grafts might promote meniscal regeneration and prevent progression of cartilage degeneration by stimulating chondrogenic differentiation of tendon-derived cells.