Oncostatin M (OSM) is a cytokine of the interleukin-6 family and plays important roles during inflammation. However, its roles in myoblast differentiation and muscle regeneration remain unexplored. We show here that OSM potently inhibited myoblast differentiation mainly by activating the JAK1/STAT1/STAT3 pathway. OSM downregulated myocyte enhancer-binding factor 2A (MEF2A), upregulated the expression of Id1 and Id2, and inhibited the transcriptional activity of MyoD and MEF2. In addition, OSM also enhanced the expression of STAT3 and OSM receptor, which constituted a positive feedback loop to further amplify OSM-induced signaling. Moreover, we found that STAT1 physically associated with MEF2 and repressed its transcriptional activity, which could account for the OSM-mediated repression of MEF2. Although undetectable in normal muscles in vivo, OSM was rapidly induced on muscle injury and then promptly downregulated just before the majority of myoblasts differentiate. Prolonged expression of OSM in muscles compromised the regeneration process without affecting myoblast proliferation, suggesting that OSM functions to prevent proliferating myoblasts from premature differentiation during the early phase of muscle regeneration.