Pluripotent stem cells (PSC) hold great promise for the treatment of human skeletal muscle diseases. However, it remains challenging to convert PSC to skeletal muscle cells, and the mechanisms by which the master regulatory transcription factor, Pax7, promotes muscle stem (satellite) cell identity are not yet understood. We have taken advantage of PSC-derived skeletal muscle precursor cells (iPax7), wherein the induced expression of Pax7 robustly initiates the muscle program and enables the in vitro generation of precursors that seed the satellite cell compartment upon transplantation. Remarkably, we found that chromatin accessibility in myogenic precursors pre-figures subsequent activation of myogenic differentiation genes. We also found that Pax7 binding is generally restricted to euchromatic regions and excluded from H3K27 tri-methylated regions in muscle cells, suggesting that recruitment of this factor is circumscribed by chromatin state. Further, we show that Pax7 binding induces dramatic, localized remodeling of chromatin characterized by the acquisition of histone marks associated with enhancer activity and induction of chromatin accessibility in both muscle precursors and lineage-committed myoblasts. Conversely, removal of Pax7 leads to rapid reversal of these features on a subset of enhancers. Interestingly, another cluster of Pax7 binding sites is associated with a durably accessible and remodeled chromatin state after removal of Pax7, and persistent enhancer accessibility is associated with subsequent, proximal binding by the muscle regulatory factors, MyoD1 and myogenin. Our studies provide new insights into the epigenetic landscape of skeletal muscle stem cells and precursors and the role of Pax7 in satellite cell specification.