Tumor necrosis factor-alpha (TNF-alpha) plays a role in several disease states such as sepsis, cachexia, and non-insulin-dependent diabetes. TNF-alpha interferes with insulin signaling and inhibits differentiation-specific gene expression in adipose tissue and skeletal muscle. We have examined the mechanisms by which TNF-alpha, in comparison to basic fibroblast growth factor (bFGF), inhibits the insulin-like growth factor-I (IGF-I)-induced differentiation of C2C12 myoblasts. Adhesion of quiescent, suspended myoblasts to collagen in high concentrations of IGF-I (10 nM) induced these cells to proliferate during the initial 24 h postplating and in so doing transiently inhibited the expression of myogenin, an essential transcription factor controlling myoblast differentiation. Low doses of IGF-I (1 nM) were minimally mitogenic and enhanced muscle-specific gene expression. Quiescent myoblasts treated with bFGF in combination with IGF-I did not express myogenin, but expressed proliferating cell nuclear antigen and underwent DNA synthesis. In contrast, TNF-alpha in the presence or absence of 1 nM IGF-I, did not stimulate DNA synthesis in myoblasts. However, TNF-alpha inhibited myogenin mRNA and protein expression. Expression of the cyclin-dependent kinase inhibitor p21 correlated with myogenin expression and myoblast differentiation, but not with growth arrest. These results indicate that both TNF-alpha and bFGF inhibit myogenin expression but differentially influence myoblast proliferation.