Loss-of-function mutations in the genes encoding dystrophin and the associated membrane proteins, the sarcoglycans, produce muscular dystrophy and cardiomyopathy. The dystrophin complex provides stability to the plasma membrane of striated muscle during muscle contraction. Increased SMAD signaling due to activation of the transforming growth factor-β (TGFβ) pathway has been described in muscular dystrophy; however, it is not known whether this canonical TGFβ signaling is pathogenic in the muscle itself. Drosophila deleted for the γ/δ-sarcoglycan gene (Sgcd) develop progressive muscle and heart dysfunction and serve as a model for the human disorder. We used dad-lacZ flies to demonstrate the signature of TGFβ activation in response to exercise-induced injury in Sgcd null flies, finding that those muscle nuclei immediately adjacent to muscle injury demonstrate high-level TGFβ signaling. To determine the pathogenic nature of this signaling, we found that partial reduction of the co-SMAD Medea, homologous to SMAD4, or the r-SMAD, Smox, corrected both heart and muscle dysfunction in Sgcd mutants. Reduction in the r-SMAD, MAD, restored muscle function but interestingly not heart function in Sgcd mutants, consistent with a role for activin but not bone morphogenic protein signaling in cardiac dysfunction. Mammalian sarcoglycan null muscle was also found to exhibit exercise-induced SMAD signaling. These data demonstrate that hyperactivation of SMAD signaling occurs in response to repetitive injury in muscle and heart. Reduction of this pathway is sufficient to restore cardiac and muscle function and is therefore a target for therapeutic reduction.