Cell transplantation holds promise as a potential treatment for cardiac dysfunction. Our group has isolated populations of murine skeletal muscle-derived stem cells (MDSCs) that exhibit stem cell-like properties. Here, we investigated the fate of MDSCs after transplantation into the hearts of dystrophin-deficient mdx mice, which model Duchenne muscular dystrophy (DMD). Transplanted MDSCs generated large grafts consisting primarily of numerous dystrophin-positive myocytes and, to a lesser degree, dystrophin-negative non-myocytes that expressed an endothelial phenotype. Most of the dystrophin-positive myocytes expressed a skeletal muscle phenotype and did not express a cardiac phenotype. However, some donor myocytes, located at the graft-host myocardium border, were observed to express cardiac-specific markers. More than half of these donor cells that exhibited a cardiac phenotype still maintained a skeletal muscle phenotype, demonstrating a hybrid state. Sex-mismatched donors and hosts revealed that many donor-derived cells that acquired a cardiac phenotype did so through fusion with host cardiomyocytes. Connexin43 gap junctions were not expressed by donor-derived myocytes in the graft. Scar tissue formation in the border region may inhibit the fusion and gap junction connections between donor and host cells. This study demonstrates that MDSC transplantation warrants further investigation as a potential therapy for cardiac dysfunction in DMD.