Volumetric muscle loss (VML) overwhelms the innate regenerative capacity of mammalian skeletal muscle (SkM), leading to numerous disabilities and reduced quality of life. Immune cells are critical responders to muscle injury and guide tissue resident stem cell– and progenitor-mediated myogenic repair. However, how immune cell infiltration and intercellular communication networks with muscle stem cells are altered following VML and drive pathological outcomes remains underexplored. Herein, we contrast the cellular and molecular mechanisms of VML injuries that result in the fibrotic degeneration or regeneration of SkM. Following degenerative VML injuries, we observed the heightened infiltration of natural killer (NK) cells as well as the persistence of neutrophils beyond 2 wk postinjury. Functional validation of NK cells revealed an antagonistic role in neutrophil accumulation in part via inducing apoptosis and CCR1-mediated chemotaxis. The persistent infiltration of neutrophils in degenerative VML injuries was found to contribute to impairments in muscle stem cell regenerative function, which was also attenuated by transforming growth factor beta 1 (TGFβ1). Blocking TGFβ signaling reduced neutrophil accumulation and fibrosis and improved muscle-specific force. Collectively, these results enhance our understanding of immune cell–stem cell cross talk that drives regenerative dysfunction and provide further insight into possible avenues for fibrotic therapy exploration.