Facioscapulohumeral muscular dystrophy (FSHD) is one of the most common neuromuscular disorders and has no cure. Due to an unknown molecular mechanism, FSHD displays overlapping manifestations with the neurodegenerative disease amyotrophic lateral sclerosis (ALS). FSHD is caused by aberrant gain of expression of the transcription factor double homeobox 4 (DUX4), which triggers a pro-apoptotic transcriptional program resulting in inhibition of myogenic differentiation and muscle wasting. Regulation of DUX4 activity is poorly known. We identify Matrin 3 (MATR3), whose mutation causes ALS and dominant distal myopathy, as a cellular factor controlling DUX4 expression and activity. MATR3 binds to the DUX4 DNA-binding domain and blocks DUX4-mediated gene expression, rescuing cell viability and myogenic differentiation of FSHD muscle cells, without affecting healthy muscle cells. Finally, we characterize a shorter MATR3 fragment that is necessary and sufficient to directly block DUX4-induced toxicity to the same extent as the full-length protein. Collectively, our data suggest MATR3 as a candidate for developing a treatment for FSHD.