Skeletal muscle growth and regeneration are attributed to satellite cells - muscle stem cells resident beneath the basal lamina that surrounds each myofibre. Quiescent satellite cells express the transcription factor Pax7 and when activated, coexpress Pax7 with MyoD. Most then proliferate, downregulate Pax7 and differentiate. By contrast, others maintain Pax7 but lose MyoD and return to a state resembling quiescence. Here we show that Pax7 is able to drive transcription in quiescent and activated satellite cells, and continues to do so in those cells that subsequently cease proliferation and withdraw from immediate differentiation. We found that constitutive expression of Pax7 in satellite-cell-derived myoblasts did not affect MyoD expression or proliferation. Although maintained expression of Pax7 delayed the onset of myogenin expression it did not prevent, and was compatible with, myogenic differentiation. Constitutive Pax7 expression in a Pax7-null C2C12 subclone increased the proportion of cells expressing MyoD, showing that Pax7 can act genetically upstream of MyoD. However these Pax7-null cells were unable to differentiate into normal myotubes in the presence of Pax7. Therefore Pax7 may be involved in maintaining proliferation and preventing precocious differentiation, but does not promote quiescence.