Mechanisms responsible for excellent marbling in Japanese black cattle, Wagyu, remain to be established. Because both muscle cells and intramuscular adipocytes are developed from mesenchymal progenitor cells during early muscle development, we hypothesized that intramuscular progenitor cells in Wagyu cattle have attenuated myogenic capacity in favor of adipogenesis, leading to high marbling but reduced muscle growth. Biceps femoris muscle biopsy samples were obtained from both Angus (n=3) and Wagyu (n=3) cattle at 12 months of age. Compared with Angus, the density of satellite cells was much lower in Wagyu muscle (by 45.8±10%, P<0.05). Consistently, the formation of myotubes from muscle-derived progenitor cells was also lower (by 64.2±12.9%, P<0.05), but adipogenic capacity was greater in Wagyu. The average muscle fiber diameter was larger in Wagyu (by 23.9±6.8%, P=0.089) despite less muscle mass, suggesting less muscle fiber formation in Wagyu compared with Angus cattle. Because satellite cells are derived from fetal myogenic cells, the reduction in satellite cell density together with lower muscle fiber formation suggests that myogenesis was attenuated during early muscle development in Wagyu cattle. Given the shared pool of mesenchymal progenitor cells, the attenuated myogenesis likely shifts progenitor cells to adipogenesis during early development, which may contribute to high intramuscular adipocyte formation in Wagyu cattle.