The X chromosome-encoded histone demethylase UTX (also known as KDM6A) mediates removal of repressive trimethylation of histone H3 lysine 27 (H3K27me3) to establish transcriptionally permissive chromatin. Loss of UTX in female mice is embryonic lethal. Unexpectedly, male UTX-null mice escape embryonic lethality due to expression of UTY, a paralog that lacks H3K27 demethylase activity, suggesting an enzyme-independent role for UTX in development and thereby challenging the need for active H3K27 demethylation in vivo. However, the requirement for active H3K27 demethylation in stem cell-mediated tissue regeneration remains untested. Here, we employed an inducible mouse KO that specifically ablates Utx in satellite cells (SCs) and demonstrated that active H3K27 demethylation is necessary for muscle regeneration. Loss of UTX in SCs blocked myofiber regeneration in both male and female mice. Furthermore, we demonstrated that UTX mediates muscle regeneration through its H3K27 demethylase activity, as loss of demethylase activity either by chemical inhibition or knock-in of demethylase-dead UTX resulted in defective muscle repair. Mechanistically, dissection of the muscle regenerative process revealed that the demethylase activity of UTX is required for expression of the transcription factor myogenin, which in turn drives differentiation of muscle progenitors. Thus, we have identified a critical role for the enzymatic activity of UTX in activating muscle-specific gene expression during myofiber regeneration and have revealed a physiological role for active H3K27 demethylation in vivo.