Fibro-adipogenic progenitors (FAPs) are typically activated in response to muscle injury, and establish functional interactions with inflammatory and muscle stem cells (MuSCs) to promote muscle repair. We found that denervation causes progressive accumulation of FAPs, without concomitant infiltration of macrophages and MuSC-mediated regeneration. Denervation-activated FAPs exhibited persistent STAT3 activation and secreted elevated levels of IL-6, which promoted muscle atrophy and fibrosis. FAPs with aberrant activation of STAT3–IL-6 signalling were also found in mouse models of spinal cord injury, spinal muscular atrophy, amyotrophic lateral sclerosis (ALS) and in muscles of ALS patients. Inactivation of STAT3–IL-6 signalling in FAPs effectively countered muscle atrophy and fibrosis in mouse models of acute denervation and ALS (SOD^G93A mice). Activation of pathogenic FAPs following loss of integrity of neuromuscular junctions further illustrates the functional versatility of FAPs in response to homeostatic perturbations and suggests their potential contribution to the pathogenesis of neuromuscular diseases.