Reactive oxygen species (ROS)-induced oxidative stress increases in skeletal muscle with aging and decreases the viability of implanted cells. Type 1 insulin-like growth factor (IGF-1) promotes the survival of skeletal muscle cells under oxidative stress. It is unknown whether IGF-1 protects muscle-derived stem cells (MDSCs) from oxidative stress. In this study, we genetically engineered rat MDSCs to overexpress IGF-1 and determined cell viability, apoptosis, and VEGF secretion under oxidative stress. Overexpression of IGF-1 prevented MDSCs from H2O2-induced caspase-dependent apoptotic cell death by upregulating the PI3K/AKT pathway, accompanied with an increase of NF-κB, p-NF-κB, Bcl-2, and VEGF, as well as a decrease of Bax. In contrast, pre-administration of picropodophyllinb, wortmannin, 1L-6-hydroxymethyl-chiro-inositol-2-((R)-2-O-methyl-3-O-octadecylcarbonate), or pyrrolidine-dithiocarbamate, specific inhibitors of IGF-1R, PI3K, AKT, and NF-κB, respectively, followed by treatment with H2O2, resulted in cell death of MDSCs. Our data indicated that IGF-1 suppresses apoptosis and enhances the paracrine function of MDSCs under oxidative stress via enhancing IGF-1R/PI3K/AKT signaling. Thus, IGF-1 gene-modified MDSCs present a potential application in the treatment of muscle wasting, such as urethra intrinsic sphincter deficiency.