Differentiation of skeletal muscle cells involves two distinct events: exit from the cell cycle and expression of muscle-specific contractile genes and formation of multinucleated myocytes. Although many studies have shown that growth factors regulate the initial step of differentiation, little is known about regulation of fusion. BC3H1 cells are a skeletal muscle cell line characterized by a nonfusing phenotype and an ability to dedifferentiate. When subjected to serum or growth factors, differentiated BC3H1 cells lose muscle-specific gene expression and re-enter the cell cycle. In this study, we describe a spontaneously fusing clone of BC3H1 cells. We demonstrate that this fusion capability is not due to altered muscle regulatory factor or adhesion molecule expression. Furthermore, we show that fusion inhibits dedifferentiation. Multinucleated BC3H1 cells do not lose myosin expression, nor do they re-enter the cell cycle. Fused BC3H1 cells react to serum stimulation with a hypertrophic response. Our results suggest that the state of differentiation, mono- or multinucleated, is essential to how myocytes react to growth stimulation and may provide a mechanism for how differentiation, fusion, and hypertrophy are regulated in vivo.