Transcription factor E3 (TFE3) belongs to a basic helix-loop-helix family, and is involved in the biology of osteoclasts, melanocytes and their malignancies. We previously reported the metabolic effects of TFE3 on insulin in the liver and skeletal muscles in animal models. In the present study, we explored a novel role for TFE3 in a skeletal muscle cell line. When TFE3 was overexpressed in C2C12 myoblasts by adenovirus before induction of differentiation, myogenic differentiation of C2C12 cells was significantly inhibited. Adenovirus-mediated TFE3 overexpression also suppressed the gene expression of muscle regulatory factors (MRFs), such as MyoD and myogenin, during C2C12 differentiation. In contrast, knockdown of TFE3 using adenovirus encoding short-hairpin RNAi specific for TFE3 dramatically promoted myoblast differentiation associated with significantly increased expression of MRFs. Consistent with these findings, promoter analyses via luciferase reporter assay and electrophoretic mobility shift assay suggested that TFE3 negatively regulated myogenin promoter activity by direct binding to an E-box, E2, in the myogenin promoter. These findings indicated that TFE3 has a regulatory role in myoblast differentiation, and that transcriptional suppression of myogenin expression may be part of the mechanism of action.