RapGEF1 (C3G) is a ubiquitously expressed protein that is essential for mammalian embryonic development. We have shown earlier that C3G regulates cytoskeletal dynamics and is required for neuronal differentiation. To determine if C3G plays a wider role in differentiation of multiple tissue types, we examined its role in skeletal muscle differentiation using the model system of C2C12 cells in culture. C3G protein is highly expressed in mouse skeletal muscle and its transcript and protein levels increase as C2C12 cells are induced to differentiate. Increase in C3G was predominantly seen in the nuclei of myotubes. Ectopic expression of C3G promoted myotube formation when cells were cultured in growth as well as differentiation medium and, enhanced MHC levels were associated with C3G expression. C3G induced differentiation required its catalytic and protein interaction domains and was dependent on the function of cellular R-Ras. Knockdown of cellular C3G using small hairpin RNA reduced expression of muscle specific markers and β-catenin, resulting in impaired differentiation. Disabling C3G function also resulted in enhanced cell death suggesting that cellular C3G is required for cell survival. In cells grown in growth medium, over-expressed C3G increased Akt activity, and C3G knockdown reduced it. C3G expression also suppressed cyclin D1 levels, and induced p27 expression, molecules involved in regulating cell proliferation. Endogenous C3G localizes to focal adhesions in myotubes and C3G expressing cells show distinct stress fibers, elongation and parallel alignment. Expression of a dominant negative construct of C3G, disrupts actin cytoskeleton and formation of focal adhesions resulting in detachment of cells from the substratum and inhibition of differentiation. Our results provide evidence that C3G plays an important role in myogenic differentiation by coordinating cell cycle exit, actin dynamics and survival signaling.