Androgens are important regulators of body composition and promote myogenic differentiation and inhibit adipogenesis of mesenchymal, multipotent cells. Here, we investigated the mechanisms by which androgens induce myogenic differentiation of mesenchymal multipotent cells. Incubation of mesenchymal multipotent C3H 10T1/2 cells with testosterone and DHT promoted nuclear translocation of AR/beta-catenin complex and physical interaction of AR, beta-catenin, and TCF-4. Inhibition of beta-catenin by small inhibitory RNAs significantly decreased testosterone-induced stimulation of myogenic differentiation. Overexpression of TCF-4, a molecule downstream of beta-catenin in Wnt signaling cascade, in C3H 10T1/2 cells, significantly upregulated expression of MyoD and MHC II proteins, and of follistatin (Fst), which binds and antagonizes native ligands of TGF-beta/Smad pathway. Gene array analysis of C3H 10T1/2 cells treated with testosterone revealed that testosterone upregulated the expression of Fst and modified the expression of several signaling molecules involved in the TGF-beta/Smad pathway, including Smad7. Lowering of testosterone levels in mice by orchiectomy led to a significant decrease in Fst and Smad7 expression; conversely, testosterone supplementation in castrated mice upregulated Fst and Smad7 mRNA expression in androgen responsive levator ani muscle. Testosterone-induced upregulation of MyoD and MHC II proteins in C3H 10T1/2 cells was abolished in cells simultaneously treated with anti-follistatin antibody, suggesting an essential role of Fst during testosterone regulation of myogenic differentiation. In conclusion, our data suggest the involvement of AR, beta-catenin and TCF-4 pathway during androgen action to activate a number of Wnt target genes, including follistatin, and cross-communication with Smad signaling pathway.