TGF-beta1 has been shown to induce autophagy in certain cells but whether and how this action is exerted in muscle and whether this activity relates to TGF-beta1 control of muscle cell differentiation remains unknown. Here, we show that expression of the autophagy-promoting protein phosphoprotein enriched in diabetes/phosphoprotein enriched in astrocytes (PED/PEA-15) progressively declines during L6 and C2C12 skeletal muscle cell differentiation. PED/PEA-15 underwent rapid induction upon TGF-beta1 exposure of L6 and C2C12 myoblasts, accompanied by impaired differentiation into mature myotubes. TGF-beta1 also induced autophagy in the L6 and C2C12 cells through a PP2A/FoxO1-mediated mechanism. Both the TGF-beta1 effect on differentiation and that on autophagy were blocked by specific PED/PEA-15 ShRNAs. Myoblasts stably overexpressing PED/PEA-15 did not differentiate and showed markedly enhanced autophagy. In these same cells, the autophagy inhibitor 3-methyladenine rescued TGF-beta1 effect on both autophagy and myogenesis, indicating that PED/PEA-15 mediates TGF-beta1 effects in muscle. Muscles from transgenic mice overexpressing PED/PEA-15 featured a significant number of atrophic fibers, accompanied by increased light chain 3 (LC3)II to LC3I ratio and reduced PP2A/FoxO1 phosphorylation. Interestingly, these mice showed significantly impaired locomotor activity compared with their non-transgenic littermates. TGF-beta1 causes transcriptional upregulation of the autophagy-promoting gene PED/PEA-15, which in turn is capable to induce atrophic responses in skeletal muscle in vivo.