Intrauterine growth restriction (IUGR) is a leading cause of neonatal morbidity and mortality in humans and domestic animals. Developmental adaptations of skeletal muscle in IUGR lead to increased risk of premature muscle loss and metabolic disease in later life. Here, we identified β-Klotho (KLB), a Fibroblast Growth Factor 21 (FGF21) co-receptor, as a novel regulator of muscle development in IUGR. Using the pig as a naturally-occurring disease model, we performed transcriptome-wide profiling of fetal muscle (day 90 of pregnancy) from IUGR and normal-weight (NW) littermates. We found that, alongside large-scale transcriptional changes comprising multiple developmental, tissue injury and metabolic gene pathways, KLB was increased in IUGR muscle. Moreover, FGF21 concentrations were increased in plasma in IUGR fetuses. Using cultures of fetal muscle progenitor cells (MPCs) we showed reduced myogenic capacity of IUGR compared to NW muscle in vitro, as evidenced by differences in fusion indices and myogenic transcript levels, as well as mTOR activity. Moreover, transfection of MPCs with KLB siRNA promoted myogenesis and mTOR activation, whereas treatment with FGF21 had opposite and dose-dependent effects in porcine and also in human fetal MPCs. In conclusion, our results identify KLB as a novel and potentially critical mediator of impaired muscle development in IUGR, through conserved mechanisms in pigs and humans. Our data sheds new light into the pathogenesis of IUGR, a significant cause of lifelong ill-health in humans and animals.