We have previously observed that Wnt signaling activates a fibrogenic program in adult muscle stem cells, called satellite cells, during aging. We genetically labeled satellite cells in a mouse model of Duchenne muscular dystrophy to follow their fate during the progression of the disease. We observed that a fraction of satellite cells had a reduced myogenic potential and showed enhanced expression of profibrotic genes compared to age-matched controls. By combining in vitro and in vivo results, we found that expression of transforming growth factor-$β$2 (TGF$β$2) was induced in response to elevated canonical Wnt signaling in dystrophic muscles and that the resulting increase in TGF$β$ activity affected the behavior of satellite cells in an autocrine or paracrine fashion. Indeed, pharmacological inhibition of the TGF$β$ pathway in vivo reduced the fibrogenic characteristics of satellite cells. These studies shed new light on the cellular and molecular mechanisms responsible for stem cell dysfunction in dystrophic muscle and may contribute to the development of more effective and specific therapeutic approaches for the prevention of muscle fibrosis.