Muscle stem cells (MuSCs) reside in a specialized niche that ensures their regenerative capacity. Although we know that innate immune cells infiltrate the niche in response to injury, it remains unclear how MuSCs adapt to this altered environment for initiating repair. Here, we demonstrate that inflammatory cytokine signaling from the regenerative niche impairs the ability of quiescent MuSCs to reenter the cell cycle. The histone H3 lysine 27 (H3K27) demethylase JMJD3, but not UTX, allowed MuSCs to overcome inhibitory inflammation signaling by removing trimethylated H3K27 (H3K27me3) marks at the Has2 locus to initiate production of hyaluronic acid, which in turn established an extracellular matrix competent for integrating signals that direct MuSCs to exit quiescence. Thus, JMJD3-driven hyaluronic acid synthesis plays a proregenerative role that allows MuSC adaptation to inflammation and the initiation of muscle repair.