Muscle cell differentiation is a result of a complex interplay between transcription factors and cell signaling proteins. Proliferating myoblasts must exit from the cell cycle prior to their differentiation. The muscle regulatory factor and myocyte enhancer factor-2 protein families play a major role in promoting muscle cell differentiation. Conversely, members of the AP-1 family of transcription factors that promote cell proliferation antagonize muscle cell differentiation. Here we tested the role of the c-Jun dimerization protein JDP2 in muscle cell differentiation. Endogenous expression of JDP2 was induced in both C2C12 myoblast and rhabdomyosarcoma (RD) cells programmed to differentiate. Ectopic expression of JDP2 in C2C12 myoblast cells inhibited cell cycle progression and induced spontaneous muscle cell differentiation. Likewise, constitutive expression of JDP2 in RD cells reduced their tumorigenic characteristics and restored their ability to differentiate into myotubes. JDP2 potentiated and synergized with 12-O-tetradecanoylphorbol-13-acetate to induce muscle cell differentiation of RD cells. In addition, JDP2 induced p38 activity in both C2 and RD cells programmed to differentiate. This is the first demonstration of a single transcription factor that rescues the myogenic program in an otherwise non-differentiating cancer cell line. Our results indicate that the JDP2 protein plays a major role in promoting skeletal muscle differentiation via its involvement in cell cycle arrest and activation of the myogenic program.