Adult bone marrow-derived cells (BMDC) are shown to contribute to muscle tissue in a step-wise biological progression. Following irradiation-induced damage, transplanted GFP-labeled BMDC become satellite cells: membrane-ensheathed mononucleate muscle stem cells. Following a subsequent exercise-induced damage, GFP-labeled multinucleate myofibers are detected. Isolated GFP-labeled satellite cells are heritably myogenic. They express three characteristic muscle markers, are karyotypically diploid, and form clones that can fuse into multinucleate cells in culture or into myofibers after injection into mouse muscles. These results suggest that two temporally distinct injury-related signals first induce BMDC to occupy the muscle stem cell niche and then to help regenerate mature muscle fibers. The stress-induced progression of BMDC to muscle satellite cell to muscle fiber results in a contribution to as many as 3.5% of muscle fibers and is due to developmental plasticity in response to environmental cues.