Metabolic reprogramming is an active regulator of stem cell fate choices, and successful stem cell differentiation in different compartments requires the induction of oxidative phosphorylation. However, the mechanisms that promote mitochondrial respiration during stem cell differentiation are poorly understood. Here we demonstrate that Stat3 promotes muscle stem cell myogenic lineage progression by stimulating mitochondrial respiration in mice. We identify Fam3a, a cytokine-like protein, as a major Stat3 downstream effector in muscle stem cells. We demonstrate that Fam3a is required for muscle stem cell commitment and skeletal muscle development. We show that myogenic cells secrete Fam3a, and exposure of Stat3-ablated muscle stem cells to recombinant Fam3a in vitro and in vivo rescues their defects in mitochondrial respiration and myogenic commitment. Together, these findings indicate that Fam3a is a Stat3-regulated secreted factor that promotes muscle stem cell oxidative metabolism and differentiation, and suggests that Fam3a is a potential tool to modulate cell fate choices.