Abnormalities in skeletal muscle repair can lead to poor function and complications such as scarring or heterotopic ossification (HO). Here, we use fibrodysplasia ossificans progressiva (FOP), a disease of progressive HO caused by ACVR1^R206H (Activin receptor type-1 receptor) mutation, to elucidate how ACVR1 affects skeletal muscle repair. Rare and unique primary FOP human muscle stem cells (Hu-MuSCs) isolated from cadaveric skeletal muscle demonstrated increased extracellular matric (ECM) marker expression, showed skeletal muscle-specific impaired engraftment and regeneration ability. Human induced pluripotent stem cell (iPSC)-derived muscle stem/progenitor cells (iMPCs) single-cell transcriptome analyses from FOP also revealed unusually increased ECM and osteogenic marker expression compared to control iMPCs. These results show that iMPCs can recapitulate many aspects of Hu-MuSCs for detailed in vitro study; that ACVR1 is a key regulator of Hu-MuSC function and skeletal muscle repair; and that ACVR1 activation in iMPCs or Hu-MuSCs may contribute to HO by changing the local tissue environment.