Skeletal muscles control many of the essential functions that our bodies constantly perform such as walking, eating and breathing. Defects in muscle function, for instance muscular dystrophy, have profound consequences. Despite extensive studies on muscles, relatively little is known about how muscle-associated cells modulate muscle function. Recently, several types of non-muscle cells have been discovered to interact closely with muscle fibers and play important roles in muscle regeneration and degeneration. Using a zebrafish model, we aim to determine the embryonic origin and functions of muscle-associated fibroblasts. We hypothesize that a subset of muscle-associated fibroblasts originates from the sclerotome, a sub-compartment of the somite. Using lineage tracing, we showed that sclerotome-derived cells undergo stereotypic migration out of each somite to surround the notochord during early development. Hedgehog (Hh) signaling is required in multiple steps during sclerotome formation. Although the initial expression of sclerotome markers can be induced in the absence of Hh signaling, active Hh signaling is essential to maintain their expression in sclerotome-derived cells. Furthermore, cell tracing experiments demonstrated that Hh signaling is required for the migration of sclerotome-derived cells. Finally, using time-lapse imaging, we showed that sclerotome-derived cells contribute to muscle-associated fibroblasts including tenocytes. We are currently investigating the function of muscle-associated cells in muscle regeneration and degeneration.