Skeletal muscle differentiation and regeneration are regulated by interactions between exogenous hormone- and growth factor-activated signaling cascades and endogenous muscle-specific transcriptional programs. IGF-I and IGF-II can promote muscle differentiation in vitro and can enhance muscle maintenance and repair in vivo. In contrast, members of the TGF-β superfamily prominently inhibit muscle differentiation and regeneration. In this study, we have evaluated functional interactions between IGF- and TGF-β-regulated signaling pathways during skeletal muscle differentiation. In the mouse C2 muscle cell line and in human myoblasts in primary culture, addition of TGF-β1 blocked differentiation in a dose-dependent way, inhibited expression of muscle-specific mRNAs and proteins, and impaired myotube formation. TGF-β1 also diminished stimulation of IGF-II gene expression in myoblasts, decreased IGF-II secretion, and reduced IGF-I receptor activation. To test the hypothesis that TGF-β1 prevents muscle differentiation primarily by blocking IGF-II production, we examined effects of IGF analogues on TGF-β actions in myoblasts. Although both IGF-I and IGF-II restored muscle gene and protein expression, and stimulated myotube formation in the presence of TGF-β1, they did not reduce TGF-β1-stimulated signaling, as measured by no decline in phosphorylation of SMA and mothers against decapentaplegic homolog (Smad)3, or in induction of TGF-β-activated target genes, including a Smad-dependent promoter-reporter plasmid. Our results demonstrate that TGF-β disrupts an IGF-II-stimulated autocrine amplification cascade that is necessary for muscle differentiation in vitro. Because this inhibitory pathway can be overcome by exogenous IGFs, our observations point toward potential strategies to counteract disorders that reduce muscle mass and strength.