We have previously isolated and identified stem cells from human anterior cruciate ligament (ACL). The purpose of this study was to evaluate the differences in proliferation, differentiation, and extracellular matrix (ECM) formation abilities between bone marrow stem cells (BMSCs) and ACL-derived stem cells (LSCs) from the same donors when cultured with different growth factors, including basic fibroblast growth factor (bFGF), epidermal growth factor, and transforming growth factor-beta 1 (TGF-beta1). Ligament tissues and bone marrow aspirate were obtained from patients undergoing total knee arthroplasty and ACL reconstruction surgeries. Proliferation, colony formation, and population doubling capacity as well as multilineage differentiation potentials of LSCs and BMSCs were compared. Gene expression and ECM production for ligament engineering were also evaluated. It was found that BMSCs possessed better osteogenic differentiation potential than LSCs, while similar adipogenic and chondrogenic differentiation abilities were observed. Proliferation rates of both LSCs and BMSCs were enhanced by bFGF and TGF-beta1. TGF-beta1 treatment significantly increased the expression of type I collagen, type III collagen, fibronectin, and alpha-smooth muscle actin in LSCs, but TGF-beta1 only upregulated type I collagen and tenascin-c in BMSCs. Protein quantification further confirmed the results of differential gene expression and suggested that LSCs and BMSCs increase ECM production upon TGF-beta1 treatment. In summary, in comparison with BMSCs, LSCs proliferate faster and maintain an undifferentiated state with bFGF treatment, whereas under TGF-beta1 treatment, LSCs upregulate major tendinous gene expression and produce a robust amount of ligament ECM protein, making LSCs a potential cell source in future applications of ACL tissue engineering.