We have identified the E3 ligase Traf7 as a direct MyoD1 target and show that cell cycle exit-an early event in muscle differentiation-is linked to decreased Traf7 expression. Depletion of Traf7 accelerates myogenesis, in part through downregulation of nuclear factor-κB (NF-κB) activity. We used a proteomic screen to identify NEMO, the NF-κB essential modulator, as a Traf7-interacting protein. Finally, we show that ubiquitylation of NF-κB essential modulator is regulated exclusively by Traf7 activity in myoblasts. Our results suggest a new mechanism by which MyoD1 function is coupled to NF-κB activity through Traf7, regulating the balance between cell cycle progression and differentiation during myogenesis.