Myogenesis is regulated by the coordinated expression of muscle regulatory factors, a family of transcription factors that includes MYOD, MYF5, myogenin and MRF4. Muscle regulatory factors are basic helix-loop-helix transcription factors that heterodimerize with E proteins to bind the regulatory regions of target genes. Their activity can be inhibited by members of the Inhibitor of DNA binding and differentiation (ID) family, which bind E-proteins with high affinity, thereby preventing muscle regulatory factor-dependent transcriptional responses. CCAAT/Enhancer Binding protein beta (C/EBPβ) is a transcription factor expressed in myogenic precursor cells that acts to inhibit myogenic differentiation, though the mechanism remains poorly understood. We identify Id3 as a novel C/EBPβ target gene that inhibits myogenic differentiation. Overexpression of C/EBPβ stimulates Id3 mRNA and protein expression, and is required for C/EBPβ-mediated inhibition of myogenic differentiation. Misexpression of C/EBPβ in myogenic precursors, such as in models of cancer cachexia, prevents the differentiation of myogenic precursors and we show that loss of Id3 rescues differentiation under these conditions, suggesting that the stimulation of Id3 expression by C/EBPβ is an important mechanism by which C/EBPβ inhibits myogenic differentiation.