Muscular atrophy is a mortality risk factor that happens with disuse, chronic disease, and aging. Recovery from atrophy requires changes in several cell types including muscle fibers, and satellite and immune cells. Here we show that Zfp697/ZNF697 is a damage-induced regulator of muscle regeneration, during which its expression is transiently elevated. Conversely, sustained Zfp697 expression in mouse muscle leads to a gene expression signature of chemokine secretion, immune cell recruitment, and extracellular matrix remodeling. Myofiber-specific Zfp697 ablation hinders the inflammatory and regenerative response to muscle injury, compromising functional recovery. We uncover Zfp697 as an essential interferon gamma mediator in muscle cells, interacting primarily with ncRNAs such as the pro-regenerative miR-206. In sum, we identify Zfp697 as an integrator of cell-cell communication necessary for tissue regeneration.