Platelet-derived growth factor receptor α (PDGFRα) is a protein that is anchored on the cell surface. This protein exhibits divergent effects in skeletal muscle. At physiological levels, signalling through this protein promotes muscle development in growing embryos and the formation of new blood vessels in injured muscle undergoing regeneration in adult animals. However, abnormally high activity of this protein often found in aged or diseased muscle causes the accumulation of scar tissues following muscle injury, which interferes with muscle function and limits the effectiveness of gene- and cell-based therapies for muscle disorders. Although compelling evidence exists for the role of this protein in scar tissue formation, little is known about the cells through which this pathway acts. Here we show in mice that signaling through this protein regulates a population of skeletal muscle resident cells that play a supportive role in muscle repair but may also cause scar tissue accumulation when aberrantly regulated. We found that these cells possess different ways to process PDGFRα protein to generate long and short variants. The short variant acts to prevent the over-activation of this protein and pathway and thus inhibit scar tissue formation. These findings provide novel mechanisms for potential therapeutic intervention of scar tissue accumulation following muscle injury or during aging.