Androgens are important regulators of body composition and promote myogenic differentiation and inhibit adipogenesis of mesenchymal, multipotent cells. Here, we investigated the mechanisms by which androgens induce myogenic differentiation of mesenchymal multipotent cells. Incubation of mesenchymal multipotent C3H 10T1/2 cells with testosterone and dihydrotestosterone promoted nuclear translocation of androgen receptor (AR)/beta-catenin complex and physical interaction of AR, beta-catenin, and T-cell factor-4 (TCF-4). Inhibition of beta-catenin by small inhibitory RNAs significantly decreased testosterone-induced stimulation of myogenic differentiation. Overexpression of TCF-4, a molecule downstream of beta-catenin in Wnt signaling cascade, in C3H 10T1/2 cells significantly up-regulated expression of myoD and myosin heavy chain II proteins and of follistatin (Fst), which binds and antagonizes native ligands of the TGF-beta/Smad pathway. Gene array analysis of C3H 10T1/2 cells treated with testosterone revealed that testosterone up-regulated the expression of Fst and modified the expression of several signaling molecules involved in the TGF-beta/Smad pathway, including Smad7. Lowering of testosterone levels in mice by orchidectomy led to a significant decrease in Fst and Smad7 expression; conversely, testosterone supplementation in castrated mice up-regulated Fst and Smad7 mRNA expression in androgen-responsive levator ani muscle. Testosterone-induced up-regulation of MyoD and myosin heavy chain II proteins in C3H 10T1/2 cells was abolished in cells simultaneously treated with anti-Fst antibody, suggesting an essential role of Fst during testosterone regulation of myogenic differentiation. In conclusion, our data suggest the involvement of AR, beta-catenin, and TCF-4 pathway during androgen action to activate a number of Wnt target genes, including Fst, and cross communication with the Smad signaling pathway.