The development of cell therapy for repairing damaged or diseased skeletal muscle has been hindered by the inability to significantly expand immature, transplantable myogenic stem cells (MuSCs) in culture. To overcome this limitation, a deeper understanding of the mechanisms regulating the transition between activated, proliferating MuSCs and differentiation-primed, poorly engrafting progenitors is needed. Here, we show that methyltransferase Setd7 facilitates such transition by regulating the nuclear accumulation of β-catenin in proliferating MuSCs. Genetic or pharmacological inhibition of Setd7 promotes in vitro expansion of MuSCs and increases the yield of primary myogenic cell cultures. Upon transplantation, both mouse and human MuSCs expanded with a Setd7 small-molecule inhibitor are better able to repopulate the satellite cell niche, and treated mouse MuSCs show enhanced therapeutic potential in preclinical models of muscular dystrophy. Thus, Setd7 inhibition may help bypass a key obstacle in the translation of cell therapy for muscle disease.