Chicken ovalbumin upstream promoter-transcription factor II (COUP-TFII) has been shown to inhibit myogenesis and skeletal muscle metabolism in vitro. However, its precise role and in vivo function in muscle development has yet to be clearly defined. COUP-TFII protein expression level is high in undifferentiated progenitors and gradually declines during differentiation, raising an important question of whether downregulation of COUP-TFII expression is required for proper muscle cell differentiation. In this study, we generated a mouse model ectopically expressing COUP-TFII in myogenic precursors to maintain COUP-TFII activity during myogenesis and found that elevated COUP-TFII activity resulted in inefficient skeletal muscle development. Using in vitro cell culture and in vivo mouse models, we showed that COUP-TFII hinders myogenic development by repressing myoblast fusion. Mechanistically, the inefficient muscle cell fusion correlates well with the transcriptional repression of Npnt, Itgb1D and Cav3, genes important for cell-cell fusion. We further demonstrated that COUP-TFII also reduces the activation of focal adhesion kinase (FAK), an integrin downstream regulator which is essential for fusion process. Collectively, our studies highlight the importance of down-regulation of COUP-TFII signaling to allow for the induction of factors crucial for myoblast fusion.