The endoplasmic reticulum chaperone GRP94 is essential for early embryonic development and in particular affects differentiation of muscle lineages. To determine why an ubiquitously expressed protein has such a specific effect, we investigated the function of GRP94 in the differentiation of established myogenic cell lines in culture. Using both genetic suppression of expression, via RNA interference, and inhibition of function, via specific chemical inhibitors, we show that GRP94 expression and activity are needed for the in vitro fusion of myoblasts precursors into myotubes and the expression of contractile proteins that mark terminal differentiation. The inhibition can be complemented by addition of insulin-like growth factors to the cultures. GRP94 is not needed for the initial steps of myogenesis, only for the steps downstream of MyoD up-regulation, coinciding with the known need for synergistic input from growth factor signaling. Indeed, GRP94 is needed for the production of insulin-like growth factors I and II (IGF-I and IGF-II) by the differentiating cells. Moreover, the depletion of the chaperone does not increase the rate of apoptosis that always accompanies myogenic differentiation. Thus, the major effect of GRP94 on muscle differentiation is mediated by its regulation of IGF production.