In adult muscles and under normal physiological conditions, satellite cells are found in a quiescent state but can be induced to enter the cell cycle by signals resulting from exercise, injury-induced muscle regeneration, or specific disease states. Once activated, satellite cells proliferate, self-renew, and differentiate to form myofibers. In the present study, we found that the zinc finger-containing factor Teashirt-3 (TSHZ3) was expressed in quiescent satellite cells of adult mouse skeletal muscles. We showed that following treatment with cardiotoxin TSHZ3 was strongly expressed in satellite cells of regenerating muscles. Moreover, immunohistochemical analysis indicated that TSHZ3 was expressed in both quiescent and activated satellite cells on intact myofibers in culture. TSHZ3 expression was maintained in myoblasts but disappeared with myotube formation. In C2C12 myoblasts, we showed that overexpression of Tshz3 impaired myogenic differentiation and promoted the down-regulation of myogenin (Myog) and up-regulation of paired-box factor 7 (Pax7). Moreover, knockdown experiments revealed a selective effect of Tshz3 on Myog regulation, and transcriptional reporter experiments indicated that TSHZ3 repressed Myog promoter. We identified the BRG1-associated factor 57 (BAF57), a subunit of the SWI/SNF complex, as a partner of TSHZ3. We showed that TSHZ3 cooperated with BAF57 to repress MYOD-dependent Myog expression. These results suggest a novel mechanism for transcriptional repression by TSHZ3 in which TSHZ3 and BAF57 cooperate to modulate MyoD activity on the Myog promoter to regulate skeletal muscle differentiation.