Poly[(ethyl alanato)(1)(p-methyl phenoxy)(1)] phosphazene (PNEA-mPh) was used to modify the surface of electrospun poly(ε-caprolactone) (PCL) nanofiber matrices having an average fiber diameter of 3000 ± 1700 nm for the purpose of tendon tissue engineering and augmentation. This study reports the effect of polyphosphazene surface functionalization on human mesenchymal stem cell (hMSC) adhesion, cell-construct infiltration, proliferation and tendon differentiation, as well as long term cellular construct mechanical properties. PCL fiber matrices functionalized with PNEA-mPh acquired a rougher surface morphology and led to enhanced cell adhesion as well as superior cell-construct infiltration when compared to smooth PCL fiber matrices. Long-term in vitro hMSC cultures on both fiber matrices were able to produce clinically relevant moduli. Both fibrous constructs expressed scleraxis, an early tendon differentiation marker, and a bimodal peak in expression of the late tendon differentiation marker tenomodulin, a pattern that was not observed in PCL thin film controls. Functionalized matrices achieved a more prominent tenogenic differentiation, possessing greater tenomodulin expression and superior phenotypic maturity according to the ratio of collagen I to collagen III expression. These findings indicate that PNEA-mPh functionalization is an efficient method for improving cell interactions with electrospun PCL matrices for the purpose of tendon repair.