Sarcopenia and myopathies cause progressive muscle weakness and degeneration, which are closely associated with fat infiltration and fibrosis in muscle. Recently, experimental research has shed light on fibro-adipogenic progenitors (FAPs), also known as muscle-resident mesenchymal progenitors with multiple differentiation potential for adipogenesis, fibrosis, osteogenesis and chondrogenesis. They are considered key regulators of muscle homeostasis and integrity. They play supportive roles in muscle development and repair by orchestrating the regulatory interplay between muscle stem cells (MuSCs) and immune cells. Interestingly, FAPs also contribute to intramuscular fat infiltration, fibrosis and other pathologies when the functional integrity of the network is compromised. In this review, we summarize recent insights into the roles of FAPs in maintenance of skeletal muscle homeostasis, and discuss the underlying mechanisms regulating FAPs behavior and fate, highlighting their roles in participating in efficient muscle repair and fat infiltrated muscle degeneration as well as during muscle atrophy. We suggest that controlling and predicting FAPs differentiation may become a promising strategy to improve muscle function and prevent irreparable muscle damage.