We have isolated a murine cDNA encoding a 9-kD protein, Chisel (Csl), in a screen for transcriptional targets of the cardiac homeodomain factor Nkx2-5. Csl transcripts were detected in atria and ventricles of the heart and in all skeletal muscles and smooth muscles of the stomach and pulmonary veins. Csl protein was distributed throughout the cytoplasm in fetal muscles, although costameric and M-line localization to the muscle cytoskeleton became obvious after further maturation. Targeted disruption of Csl showed no overt muscle phenotype. However, ectopic expression in C2C12 myoblasts induced formation of lamellipodia in which Csl protein became tethered to membrane ruffles. Migration of these cells was retarded in a monolayer wound repair assay. Csl-expressing myoblasts differentiated and fused normally, although in the presence of insulin-like growth factor (IGF)-1 they showed dramatically enhanced fusion, leading to formation of large dysmorphogenic "myosacs." The activities of transcription factors nuclear factor of activated T cells (NFAT) and myocyte enhancer-binding factor (MEF)2, were also enhanced in an IGF-1 signaling-dependent manner. The dynamic cytoskeletal localization of Csl and its dominant effects on cell shape and behavior and transcription factor activity suggest that Csl plays a role in the regulatory network through which muscle cells coordinate their structural and functional states during growth, adaptation, and repair.