The stress kinase c-jun N-terminal kinase (JNK) was recently shown to be involved in the pathophysiology of major inflammatory conditions, including Alzheimer's disease, stroke, obesity, and type II diabetes. However, the role of JNK in regulating inflammatory events in skeletal muscle is only beginning to be explored. IGF-I is the major hormone that promotes muscle growth and development. Here we used a novel, JNK interacting protein (JIP)-derived JNK peptide inhibitor to establish that JNK suppresses the biological activity of IGF-I in skeletal muscle progenitor cells. In these myoblasts, TNFalpha and its downstream receptor substrates, neutral-sphingomyelinase (N-SMase) and N-acetyl-d-sphingosine (C2-ceramide), induce JNK kinase activity in a time-dependent manner. Consistent with these results, TNFalpha induces JNK binding to insulin receptor substrate 1 (IRS-1) but is unable to inhibit IGF-I-induced IRS-1 tyrosine phosphorylation in myoblasts that are treated with the JNK peptide inhibitor. More importantly, JNK activation induced by TNFalpha, C2-ceramide, and N-SMase is associated with reduced expression of the critical muscle transcription factor myogenin as well as the differentiation marker myosin heavy chain (MHC). The JNK peptide inhibitor, but not the control peptide, completely reverses this inhibition of both myogenin and MHC. In the absence of IGF-I, TNFalpha, C2-ceramide, N-SMase and the JNK inhibitor are inactive, as shown by their inability to affect IRS tyrosine phosphorylation and protein expression of myogenin and MHC. These results establish that the resistance of muscle progenitor cells to IGF-I, which is caused by inflammatory stimuli, is mediated by the JNK stress kinase pathway.