Gene-targeted therapies, such as adeno-associated viral vector (AAV)-mediated gene therapy and cell-mediated therapy using myogenic stem cells, are hopeful molecular strategies for muscular dystrophy. In addition, drug therapies based on the pathophysiology of muscular dystrophy patients are desirable. Multidisciplinary approaches to drug design would offer promising therapeutic strategies. Myostatin, a member of the transforming growth factor-beta superfamily, is predominantly produced by skeletal muscle and negatively regulates the growth and differentiation of cells of the skeletal muscle lineage. Myostatin inhibition would increase the skeletal muscle mass and prevent muscle degeneration, regardless of the type of muscular dystrophy. Myostatin inhibitors include myostatin antibodies, myostatin propeptide, follistatin and follistatin-related protein. Although follistatin possesses potent myostatin-inhibiting activity, it works as an efficient inhibitor of activins. Unlike myostatin, activins regulate the growth and differentiation of nearly all cell types, including cells of the gonads, pituitary gland and skeletal muscle. We have developed a myostatin-specific inhibitor derived from follistatin, designated FS I-I. Transgenic mice expressing this myostatin-inhibiting peptide under the control of a skeletal muscle-specific promoter showed increased skeletal muscle mass and strength. mdx mice were crossed with FS I-I transgenic mice and any improvement of the pathological signs was investigated. The resulting mdx/FS I-I mice exhibited increased skeletal muscle mass and reduced cell infiltration in muscles. Muscle strength was also recovered in mdx/FS I-I mice. Our data indicate that myostatin inhibition by this follistatin-derived peptide has therapeutic potential for muscular dystrophy.