Facioscapulohumeral muscular dystrophy (FSHD) is a prevalent, incurable myopathy. FSHD is highly heterogeneous, with patients following a variety of clinical trajectories, complicating clinical trials. Skeletal muscle in FSHD undergoes fibrosis and fatty replacement that can be accelerated by inflammation, adding to heterogeneity. Well controlled molecular studies are thus essential to both categorise FSHD patients into distinct subtypes and understand pathomechanisms. Here, we further analysed RNA-sequencing data from 24 FSHD patients, each of whom donated a biopsy from both a non-inflamed (TIRM−) and inflamed (TIRM+) muscle, and 15 FSHD patients who donated peripheral blood mononucleated cells (PBMCs), alongside non-affected control individuals. Differential gene expression analysis identified suppression of mitochondrial biogenesis and up-regulation of fibroadipogenic progenitor (FAP) gene expression in FSHD muscle, which was particularly marked on inflamed samples. PBMCs demonstrated suppression of antigen presentation in FSHD. Gene expression deconvolution revealed FAP expansion as a consistent feature of FSHD muscle, via meta-analysis of 7 independent transcriptomic datasets. Clustering of muscle biopsies separated patients in an unbiased manner into clinically mild and severe subtypes, independently of known disease modifiers (age, sex, D4Z4 repeat length). Lastly, the first genome-wide analysis of alternative splicing in FSHD muscle revealed perturbation of autophagy, BMP2 and HMGB1 signalling. Overall, our findings reveal molecular subtypes of FSHD with clinical relevance and identify novel pathomechanisms for this highly heterogeneous condition.