Loss of silencing of the DUX4 gene on chromosome 4 causes facioscapulohumeral muscular dystrophy. While high level DUX4 expression induces apoptosis, the effects of low level DUX4 expression on human myogenic cells are not well understood. Low levels and sporadic expression of DUX4 have been reported in FSHD biopsy samples and myoblast cultures. Here, we show that a large set of human myogenic genes is rapidly deregulated by DUX4, including MYOD1 and MYF5, which are efficiently repressed even by low, non-toxic levels of DUX4. Human myoblasts modified to express low nontoxic levels of DUX4 were significantly impaired from differentiating into myotubes in vitro. Surprisingly, inhibition of differentiation does not require the transcriptional activation domain, thus is likely a feature of all mammalian DUX genes. DUX4 does not bind near the MYF5 gene, but has a prominent ChIP-seq peak within the MYF5 −118 kb enhancer. We find that when DUX4 binds at this site, it directs enhancer activity towards a nearby transcriptional start site for a noncoding nonfunctional RNA we name DIME (DUX4-induced MYF5 enhancer) transcript. These data highlight the anti-myogenic properties of DUX4 in human myogenic progenitor cells, and provide an example of enhancer disruption in the downregulation of MYF5.