Myostatin (GDF-8) is known to play an important role in muscle regeneration, and myostatin is also expressed during the early phases of fracture healing. In this study we used fluorescent immunohistochemistry to define the temporal and spatial localization of myostatin during muscle and bone repair following deep penetrant injury in a mouse model. We then used hydrogel delivery of exogenous myostatin in the same injury model to determine the effects of myostatin exposure on muscle and bone healing. Results show that while myostatin was constitutively expressed in the cytoplasm of intact skeletal muscle fibers, a pool of intense myostatin staining was observed amongst injured skeletal muscle fibers 12-24 hours post-surgery. Myostatin was also expressed in the soft callus chondrocytes 4 days following osteotomy. Hydrogel delivery of 10 or 100 ug/ml recombinant myostatin decreased fracture callus cartilage area relative to total callus area in a dose-dependent manner by 41% and 80% (p<0.05), respectively, compared to vehicle treatment. Myostatin treatment also dose-dependently decreased fracture callus total bone volume by 23% and 47% (p<0.05), with the higher dose of recombinant myostatin yielding the greatest decrease in callus bone volume. Finally, exogenous myostatin treatment caused a significant, dose-dependent increase in fibrous tissue formation in skeletal muscle. Together, these findings suggest that myostatin may inhibit bone repair after traumatic musculoskeletal injury through both autocrine (soft-callus chondrocytes) and paracrine (surrounding injured muscle fibers) mechanisms. Thus, early pharmacological inhibition of myostatin is likely to improve the regenerative potential of both muscle and bone following deep penetrant musculoskeletal injury.