Mesoangioblasts have been characterized as a population of vessel-associated stem cells able to differentiate into several mesodermal cell types, including skeletal muscle. Here, we report that the paired box transcription factor Pax3 plays a crucial role in directing mouse mesoangioblasts toward skeletal myogenesis in vitro and in vivo. Mesoangioblasts isolated from the aorta of Pax3 null embryos are severely impaired in skeletal muscle differentiation, whereas most other differentiation programs are not affected by the absence of Pax3. Moreover, Pax3-/- null mesoangioblasts failed to rescue the myopathic phenotype of the α-sarcoglycan mutant mouse. In contrast, mesoangioblasts from Pax3 gain of function, Pax3PAX3-FKHR/+, mice display enhanced myogenesis in vitro and are more efficient in regenerating new muscle fibers in this model of muscular dystrophy. These data demonstrate that Pax3 is required for the differentiation of mesoangioblast stem cells into skeletal muscle, in keeping with its role in orchestrating entry into the myogenic program. ©AlphaMed Press.