Intervertebral disc (IVD) injuries are a cause of degenerative changes in adults which can lead to back pain, a leading cause of disability. We developed a model of neonatal IVD regeneration with full functional restoration and investigate the cellular dynamics underlying this unique healing response. We employed genetic lineage tracing in mice using Scleraxis (Scx) and Sonic hedgehog (Shh) to fate-map annulus fibrosus (AF) and nucleus pulposus (NP) cells, respectively. Results indicate functional AF regeneration after severe herniation injury occurs in neonates and not adults. AF regeneration is mediated by Scx-lineage cells that lose ScxGFP expression and adopt a stem/progenitor phenotype (Sca-1, days 3–14), proliferate, and then redifferentiate towards type I collagen producing, ScxGFP+ annulocytes at day 56. Non Scx-lineage cells were also transiently observed during neonatal repair, including Shh-lineage cells, macrophages, and myofibroblasts; however, these populations were no longer detected by day 56 when annulocytes redifferentiate. Overall, repair did not occur in adults. These results identify an exciting cellular mechanism of neonatal AF regeneration that is predominantly driven by Scx-lineage annulocytes.