"Teardrops on My Guitar" is a country pop song with a length of three minutes and 35 seconds. It is set in common time and has a moderate tempo of 104 beats per minute. It is written in the key of B♭ major and Swift's vocals span one octave, from F3 to B♭4. Swift sings in a breathless manner. It follows the chord progression B♭–Gm–E♭–F. The track's instrumentation is gently guided by mandolin and acoustic guitar, with accents of brushed drums. It ultimately resulting in a simple and tender undertone.
The lyrics of "Teardrops on My Guitar" speak of heartbreak and are direct, referring to the subject by his first name, Drew. The song describes fancying someone who is already interested in someone else and, therefore, maintaining the sentiments a secret. To him, Swift acted as though she was happy about his relationship, while crying and lamenting at home. Dave Heaton of PopMatters interpreted the lines "And there she goes, so perfectly / The kind of flawless I wish I could be" to address Swift's ideal of perfection and her attempting to meet it, but not succeeding, a predominant theme on Fearless.