Skeletal muscle stem cells, called satellite cells, are a quiescent heterogeneous population. Their heterogeneity is influenced by Pax7, a well-defined transcriptional regulator of satellite cell functions that defines two subpopulations: Pax7(Hi) and Pax7(Lo). However, the mechanisms by which these subpopulations are established and maintained during myogenesis are not completely understood. Here we show that miR-431, which is predominantly expressed in the skeletal muscle, mediates satellite cell heterogeneity by fine-tuning Pax7 levels during muscle development and regeneration. In miR-431 transgenic mice, the Pax7(Lo) subpopulation is enriched, enhances myogenic differentiation and accelerates muscle regeneration. Notably, miR-431 attenuates the muscular dystrophic phenotype in mdx mice and may be a potential therapeutic target in muscular diseases. miR-431 transgenic mice are a unique genetic model for investigating the cellular features and biological functions of Pax7(Lo) satellite cells during muscle development and regeneration.