The highly orientated collagen fibers in tendons play a critical role for transferring tensile stress, and they demonstrate birefringent optical properties. However, the influence that proteoglycans (PGs) have on the optical properties of tendons is yet to be fully elucidated. PGs are the essential components of the tendon extracellular matrix; the changes in their quantities and compositions have been associated with tendinopathies. In this study, polarization sensitive optical coherence tomography (PS-OCT) has been used to reveal the relationship between PG content/location and birefringence properties of tendons. Fresh chicken tendons were imaged at regular intervals by PS-OCT and polarization light microscopy during the extraction of PGs, using guanidine hydrochloride (GuHCl). Complementary time-lapsed images taken from the two modalities mutually demonstrated that the extraction of PGs disturbed the local organization of collagen bundles. This corresponded with a decrease in birefringence and associated banding pattern observed by PS-OCT. Furthermore, this study revealed there was a higher concentration of PGs in the outer sheath region than in the fascicles, and therefore the change in birefringence was reduced when extraction was performed on unsheathed tendons. The results provide new insights of tendon structure and the role of PGs on the structural stability of tendons, which also demonstrates the great potential for using PS-OCT as a diagnostic tool to examine tendon pathology.