Type II Diabetes (T2DM) dramatically impairs the tendon healing response, resulting in decreased collagen organization and mechanics relative to non-diabetic tendons. Despite this burden, there remains a paucity of information regarding the mechanisms that govern impaired healing of diabetic tendons. Mice were placed on either a high fat diet (T2DM) or low fat diet (lean) and underwent flexor tendon transection and repair surgery. Healing was assessed via mechanical testing, histology and changes in gene expression associated with collagen synthesis, matrix remodeling, and macrophage polarization. Obese/diabetic tendons healed with increased scar formation and impaired mechanical properties. Consistent with this, prolonged and excess expression of extracellular matrix (ECM) components were observed in obese/T2DM tendons. Macrophages are involved in both inflammatory and matrix deposition processes during healing. Obese/T2DM tendons healed with increased expression of markers of pro-inflammatory M1 macrophages, and elevated and prolonged expression of M2 macrophages markers that are involved in ECM deposition. Here we demonstrate that tendons from obese/diabetic mice heal with increased scar formation and increased M2 polarization, identifying excess M2 macrophage activity and matrix synthesis as a potential mechanism of the fibrotic healing phenotype observed in T2DM tendons, and as such a potential target to improve tendon healing in T2DM.