Calcium signaling is essential for the differentiation of many cell types, including skeletal muscle cells, but its mechanisms remain elusive. Here we demonstrate a crucial role for nicotinic acid adenine dinucleotide phosphate (NAADP) signaling in skeletal muscle differentiation. Although the inositol trisphosphate pathway may have a partial role to play in this process, the ryanodine signaling cascade is not involved. In both skeletal muscle precursors and C2C12, cells interfering with NAADP signaling prevented differentiation, whereas promoting NAADP signaling potentiated differentiation. Moreover, siRNA knockdown of two-pore channels, the target of NAADP, attenuated differentiation. The data presented here strongly suggest that in myoblasts, NAADP acts at acidic organelles on the recently discovered two-pore channels to promote differentiation.