Updated project metadata. Aged skeletal muscle is markedly affected by fatty muscle infiltration and strategies to reduce the occurrence of adipocytes within skeletal muscle, the intramuscular adipose tissue (IMAT), are urgently needed. Fibroblast growth factor-2 (FGF-2) is a critical growth factor for muscle tissue. Here, we show that FGF-2 not only stimulates muscle growth, but also promotes intramuscular adipogenesis. Using multiple screening assays for upstream and downstream signaling of microRNA (miR)-29a we located the secreted protein and adipogenic inhibitor SPARC to an FGF-2 signaling pathway that is conserved between skeletal muscle cells from mice and humans and that is activated in skeletal muscle from aged mice. FGF-2 induces the miR-29a/SPARC axis through transcriptional activation of FRA-1 which binds and activates an evolutionary conserved AP-1 site element proximal in the miR-29a promoter. Genetic deletions in muscle cells and AAV-mediated overexpression of FGF-2 or SPARC in mouse skeletal muscle revealed that this axis regulates differentiation of fibro/adipogenic progenitors in vitro and intramuscular fat formation in vivo. Thus, our data highlight an ambivalent role of FGF-2 for adult skeletal muscle and reveal a novel pathway to combat fat accumulation in aged skeletal muscle.