Recent progress has been made on the role of oncoproteins c-Ski and related SnoN in the control of cellular transformation. c-Ski/SnoN potently repress transforming growth factor-beta (TGF-beta) antiproliferative signaling through physical interaction with signal transducers called Smads. Overexpression of c-Ski/SnoN also induces skeletal muscle differentiation, but how c-Ski/SnoN function in myogenesis is largely unknown. During our investigation on the role of sumoylation in TGF-beta signaling, we inadvertently found that SnoN is modified by small ubiquitin-like modifier-1 (SUMO-1). Here, we biochemically characterize SnoN sumoylation in detail and report the physiological function of the modification. Sumoylation occurs primarily at lysine 50 (Lys-50). PIAS1 and PIASx proteins physically interact with SnoN to stimulate its sumoylation, thus serving as SUMO-protein isopeptide ligases (E3) for SnoN sumoylation. SnoN sumoylation does not alter its metabolic stability or its ability to repress TGF-beta signaling. Notably, loss of sumoylation in the Lys-50 site (via a Lys-to-Arg point mutation) potently activates muscle-specific gene expression and enhances myotube formation. Our study suggests a novel role for SUMO modification in the regulation of myogenic differentiation.