Background: Muscle atrophy, fibrosis, and fatty infiltration are common to a variety of sports-related and degenerative conditions and are thought to be irreversible. Fibroadipogenic progenitors (FAPs) are multipotent resident muscle stem cells with the capacity to differentiate into fibrogenic as well as white and beige adipose tissue (BAT). FAPs that have assumed a BAT differentiation state (FAP-BAT) have proven efficacious in treating muscle degeneration in numerous injury models. Purpose: To characterize the subpopulation of murine FAPs with FAP-BAT activity, determine whether their promyogenic effect is mediated via exosomes, and analyze human FAPs for an analogous promyogenic exosome-rich subpopulation. Study Design: Controlled laboratory study. Methods: FAPs from UCP1 reporter mice were isolated via fluorescence-activated cell sorting and sorted according to the differential intensity of the UCP1 signal observed: negative for UCP1 (UCP1–), intermediate intensity (UCP1+), and high intensity (UCP1++). Bulk RNA sequencing was performed on UCP1–, UCP1+, and UCP1++ FAPs to evaluate distinct characteristics of each population. Exosomes were harvested from UCP1++ FAP-BAT exosomes (Exo-FB) as well as UCP1– non–FAP-BAT exosomes (Exo-nFB) cells using cushioned-density gradient ultracentrifugation and used to treat C2C12 cells and mouse embryonic fibroblasts in vitro, and the myotube fusion index was assessed. Exo-FB and Exo-nFB were then used to treat wild type C57B/L6J mice that had undergone a massive rotator cuff tear. At 6 weeks mice were sacrificed, and supraspinatus muscles were harvested and analyzed for muscle atrophy, fibrosis, fatty infiltration, and UCP1 expression. Single-cell RNA sequencing was then performed on FAPs isolated from human muscle that were treated with the beta-agonist formoterol or standard media to assess for the presence of a parallel promyogenic subpopulation of FAP-BAT cells in humans. Results: Flow cytometry analysis of sorted UCP1 reporter mouse FAPs revealed a trimodal distribution of UCP1 signal intensity, which correlated with 3 distinct transcriptomic profiles characterized with bulk RNA sequencing. UCP1++ cells were marked by high mitochondrial gene expression, BAT markers, and exosome surface makers; UCP1– cells were marked by fibrogenic markers; and UCP1+ cells were characterized differential enrichment of white adipose tissue markers. Exo-FB treatment of C2C12 cells resulted in robust myotube fusion, while treatment of mouse embryonic fibroblasts resulted in differentiation into myotubes. Treatment of cells with Exo-nFB resulted in poor myotube formation. Mice that were treated with Exo-FB at the time of rotator cuff injury demonstrated markedly reduced muscle atrophy and fatty infiltration as compared with treatment with Exo-nFB or phosphate-buffered saline. Single-cell RNA sequencing of human FAPs from the rotator cuff revealed 6 distinct subpopulations of human FAPs, with one subpopulation demonstrating the presence of UCP1+ beige adipocytes with a distinct profile of BAT, mitochondrial, and extracellular vesicle–associated markers. Conclusion: FAP-BAT cells form a subpopulation of FAPs with upregulated beige gene expression and exosome production that mediate promyogenic effects in vitro and in vivo, and they are present as a transcriptomically similar subpopulation of FAPs in humans. Clinical Relevance: FAP-BAT cells and their exosomes represent a potential therapeutic avenue for treating rotator cuff muscle degeneration.