Many adult tissues contain resident stem cells, such as the Pax7⁺ satellite cells within skeletal muscle, that regenerate parenchymal elements following damage. Tissue-resident mesenchymal progenitors (MPs) also participate in regeneration, although their function and fate in this process are unclear. Here, we identify Hypermethylated in cancer 1 (Hic1) as a marker of MPs in skeletal muscle and further show that Hic1 deletion leads to MP hyperplasia. Single-cell RNA-seq and ATAC-seq analysis of Hic1⁺ MPs in skeletal muscle shows multiple subpopulations, which we further show have distinct functions and lineage potential. Hic1⁺ MPs orchestrate multiple aspects of skeletal muscle regeneration by providing stage-specific immunomodulation and trophic and mechanical support. During muscle regeneration, Hic1⁺ derivatives directly contribute to several mesenchymal compartments including Col22a1-expressing cells within the myotendinous junction. Collectively, these findings demonstrate that HIC1 regulates MP quiescence and identifies MP subpopulations with transient and enduring roles in muscle regeneration.