The differentiation and maturation of skeletal muscle cells into functional fibers is coordinated largely by inductive signals which act through discrete intracellular signal transduction pathways. Recently, the calcium-activated phosphatase calcineurin (PP2B) and the family of transcription factors known as NFAT have been implicated in the regulation of myocyte hypertrophy and fiber type specificity. Here we present an analysis of the intracellular mechanisms which underlie myocyte differentiation and fiber type specificity due to an insulinlike growth factor 1 (IGF-1)-calcineurin-NFAT signal transduction pathway. We demonstrate that calcineurin enzymatic activity is transiently increased during the initiation of myogenic differentiation in cultured C2C12 cells and that this increase is associated with NFATc3 nuclear translocation. Adenovirus-mediated gene transfer of an activated calcineurin protein (AdCnA) potentiates C2C12 and Sol8 myocyte differentiation, while adenovirus-mediated gene transfer of noncompetitive calcineurin-inhibitory peptides (cain or DeltaAKAP79) attenuates differentiation. AdCnA infection was also sufficient to rescue myocyte differentiation in an IGF-depleted myoblast cell line. Using 10T1/2 cells, we demonstrate that MyoD-directed myogenesis is dramatically enhanced by either calcineurin or NFATc3 cotransfection, while a calcineurin inhibitory peptide (cain) blocks differentiation. Enhanced myogenic differentiation directed by calcineurin, but not NFATc3, preferentially specifies slow myosin heavy-chain expression, while enhanced differentiation through mitogen-activated protein kinase kinase 6 (MKK6) promotes fast myosin heavy-chain expression. These data indicate that a signaling pathway involving IGF-calcineurin-NFATc3 enhances myogenic differentiation whereas calcineurin acts through other factors to promote the slow fiber type program.