Fibromodulin (Fmod), which is an extracellular matrix protein, belongs to the extracellular matrix small-leucine-rich proteoglycan family. Fmod is abundantly expressed in muscles and connective tissues and is involved in biological regulation processes, including cell apoptosis, cell adhesion, and modulation of cytokine activity. Fmod is the main regulator of myostatin, which controls the development of muscle cells, but its regulatory path is unknown. Chicken models are ideal for studying embryonic skeletal muscle development; therefore, to investigate the mechanism of Fmod in muscle development, Fmod-silenced and Fmod-overexpressed chicken myoblasts were constructed. The results showed that Fmod plays a positive role in differentiation by detecting the expression of myogenic differentiation markers, immunofluorescence of MyHC protein, and myotube formation in myoblasts. Fmod regulates expression of atrophy-related genes to alleviate muscle atrophy, which was confirmed by histological analysis of breast muscles in Fmod-modulated chicks in vivo. Additionally, genes differentially expressed between Fmod knockdown and normal myoblasts were enriched in the signaling pathway of transforming growth factor β (TGF-β). Both Fmod-silenced and Fmod-overexpressed myoblasts regulated the expression of TGFBR1 and p-Smad3. Thus, Fmod can promote differentiation but not proliferation of myoblasts by regulating the TGF-β signaling pathway, which may serve a function in muscular atrophy.