Intrauterine growth restriction (IUGR) reduces skeletal muscle mass in fetuses and offspring. Our objective was to determine whether myoblast dysfunction due to intrinsic cellular deficiencies or serum factors reduces myofibre hypertrophy in IUGR fetal sheep. At 134 days, IUGR fetuses weighed 67% less (P < 0.05) than controls and had smaller (P < 0.05) carcasses and semitendinosus myofibre areas. IUGR semitendinosus muscles had similar percentages of pax7-positive nuclei and pax7 mRNA but lower (P < 0.05) percentages of myogenin-positive nuclei (7 ± 2% and 13 ± 2%), less myoD and myogenin mRNA, and fewer (P < 0.05) proliferating myoblasts (PNCA-positive–pax7-positive) than controls (44 ± 2% vs. 52 ± 1%). Primary myoblasts were isolated from hindlimb muscles, and after 3 days in growth media (20% fetal bovine serum, FBS), myoblasts from IUGR fetuses had 34% fewer (P < 0.05) myoD-positive cells than controls and replicated 20% less (P < 0.05) during a 2 h BrdU pulse. IUGR myoblasts also replicated less (P < 0.05) than controls during a BrdU pulse after 3 days in media containing 10% control or IUGR fetal sheep serum (FSS). Both myoblast types replicated less (P < 0.05) with IUGR FSS-supplemented media compared to control FSS-supplemented media. In differentiation-promoting media (2% FBS), IUGR and control myoblasts had similar percentages of myogenin-positive nuclei after 5 days and formed similar-sized myotubes after 7 days. We conclude that intrinsic cellular deficiencies in IUGR myoblasts and factors in IUGR serum diminish myoblast proliferation and myofibre size in IUGR fetuses, but intrinsic myoblast deficiencies do not affect differentiation. Furthermore, the persistent reduction in IUGR myoblast replication shows adaptive deficiencies that explain poor muscle growth in IUGR newborn offspring.