Muscle trauma is highly morbid due to intramuscular scarring, or fibrosis, and muscle atrophy. Studies have shown that bone morphogenetic proteins (BMPs) reduce muscle atrophy. However, increased BMP signaling at muscle injury sites causes heterotopic ossification, as seen in patients with fibrodysplasia ossificans progressiva (FOP), or patients with surgically placed BMP implants for bone healing. We use a genetic mouse model of hyperactive BMP signaling to show the development of intramuscular fibrosis surrounding areas of ectopic bone following muscle injury. Rapamycin, which we have previously shown to eliminate ectopic ossification in this model, also eliminates fibrosis without reducing osteogenic differentiation, suggesting clinical value for patients with FOP and with BMP implants. Finally, we use reporter mice to show that BMP signaling is positively associated with myofiber cross-sectional area. These findings underscore an approach in which 2 therapeutics (rapamycin and BMP ligand) can offset each other, leading to an improved outcome.