We investigated the mechanism whereby expression of a transgene encoding a locally acting isoform of insulin-like growth factor 1 (mIGF-1) enhances repair of skeletal muscle damage. Increased recruitment of proliferating bone marrow cells to injured MLC/mIgf-1 transgenic muscles was accompanied by elevated bone marrow stem cell production in response to distal trauma. Regenerating MLC/mIgf-1 transgenic muscles contained increased cell populations expressing stem cell markers, exhibited accelerated myogenic differentiation, expressed markers of regeneration and readily converted cocultured bone marrow to muscle. These data implicate mIGF-1 as a powerful enhancer of the regeneration response, mediating the recruitment of bone marrow cells to sites of tissue damage and augmenting local repair mechanisms.