In Duchenne muscular dystrophy, progressive loss of muscle tissue is accompanied by fibrosis, chronic inflammation and reduced muscle regenerative capacity. Although much is known about the development of fibrosis and chronic inflammation in muscular dystrophy, less is known about how they are mechanistically linked to loss of muscle regenerative capacity. We have developed a proteomics method to discover dystrophy-associated changes in the muscle progenitor cell niche, which identified serine proteases, and especially neutrophil elastase, as candidates. We show that elastase activity is increased in dystrophic (mdx^4cv) muscle and impairs myoblast survival in culture. While the effect of elastase on C2C12 cell survival correlates with the kinetics of elastase-mediated degradation of the substrate to which the cells adhere, the effect of elastase on satellite cell-derived primary myoblast growth and differentiation is substrate-independent and even more dramatic than the effect on C2C12 cells, suggesting a detrimental role for elastase on myogenesis in vivo. Additionally, elastase impairs differentiation of both primary and C2C12 myoblasts into myotubes. Our findings evidence the importance of neutrophil-mediated inflammation in muscular dystrophy and indicate elastase-mediated regulation of myoblast behaviour as a potential mechanism underlying loss of regenerative capacity in dystrophic muscle.