Volumetric muscle defect, caused by trauma or combat injuries, is a major health concern leading to severe morbidity. It is characterized by partial or full thickness loss of muscle and its bio-scaffold, resulting in extensive fibrosis and scar formation. Therefore, the ideal therapeutic option is to use stem cells combined with bio-scaffolds to restore muscle. For this purpose, muscle-derived stem cells (MDSCs) are a great candidate due to their unique multi-lineage differentiation potential. In this study, we evaluated the regeneration potential of MDSCs for muscle loss repair using a novel in situ fibrin gel casting. Muscle defect was created by a partial thickness wedge resection in the tibialis anterior (TA) muscles of NSG mice which created an average of 25% mass loss. If untreated, this defect leads to severe muscle fibrosis. Next, MDSCs were delivered using a novel in situ fibrin gel casting method. Our results demonstrated MDSCs are able to engraft and form new myofibers in the defect when casted along with fibrin gel. LacZ labeled MDSCs were able to differentiate efficiently into new myofibers and significantly increase muscle mass. This was also accompanied by significant reduction of fibrotic tissue in the engrafted muscles. Furthermore, transplanted cells also contributed to new vessel formation and satellite cell seeding. These results confirmed the therapeutic potential of MDSCs and feasibility of direct in situ casting of fibrin/MDSC mixture to repair muscle mass defects. •Severe skeletal muscle loss cannot be repaired by endogenous mechanisms leading to muscle fibrosis.•Muscle stem cells along with appropriate bio-scaffolds are considered as a potential therapeutic option in these cases.•Muscle-derived stem cells (MDSCs) are one of the best candidates for muscle loss repair due to their unique potentials.•MDSCs combined with fibrin gel casting enables successful repair of muscle loss in the mouse model of muscle defect.