Granulin-epithelin precursor (GEP) is an autocrine growth factor that has been implicated in embryonic development, tissue repair, tumorigenesis, and inflammation. Here we report that GEP was expressed in skeletal muscle tissue and its level was differentially altered in the course of C2C12 myoblast fusion. The GEP expression during myoblast fusion was a consequence of MyoD transcription factor binding to several E-box (CANNTG) sequences in the 5'-flanking regulatory region of GEP gene, followed by transcription. Recombinant GEP potently inhibited myotube formation from C2C12 myoblasts whereas the knockdown of endogenous of GEP via a siRNA approach accelerated the fusion of myoblasts to myotubes. Interestingly, the muscle fibers of GEP knockdown mice were larger in number but noticeably smaller in size when compared to the wild-type. Mechanistic studies revealed that during myoblast fusion, the addition of GEP led to remarkable reductions in the expressions of muscle-specific transcription factors, including MyoD. In addition, the regulation of myotube formation by GEP is mediated by the anti-myogenic factor JunB, which is upregulated following GEP stimulation. Thus, GEP growth factor, JunB, and MyoD transcription factor form a regulatory loop and act in concert in the course of myogenesis.