Injury to skeletal muscle fibers triggers tissue-wide reparative and regenerative responses. Poor repair of injured muscle cells, as observed in muscle diseases such as Limb-Girdle-Muscular-Dystrophy-2B (LGMD2B), leads to tissue-scale chronic inflammation and muscle degeneration. Injury-triggered vesicle fusion is a critical cell-repair response, and fusion of multivesicular bodies (MVBs) causing exosome release facilitates intercellular signaling to regulate tissue function. However, whether MVB fusion and exosome release supports muscle cell repair, and how this may be altered in repair-compromised disease (LGMD2B) to influence muscle health remains unknown. Using CD63-phluorin as a reporter for monitoring fusion of individual MVBs, we find muscle cell injury triggers rapid (within seconds) and robust (10-fold increase) MVB fusion, resulting in a bolus secretion of exosome by the injured cell. This exosome release is increased further in LGMD2B patient muscle cells, which are characterized by poor repair capacity. We subsequently find increased endomysial accumulation of CD63-labeled exosomes in the mouse model of LGMD2B. Treatment that improves the repair ability of LGMD2B patient cells reduced exosome secretion in-vitro. This treatment also reduced endomysial accumulation of exosomes in the LGMD2B mouse model and reduced muscle degeneration. We further observed that injury-triggered MVB fusion depends upon calcium and calcium-triggered translocation of Annexin-A2 on MVBs. MVB fusion and exosome secretion by injured muscle cells is reduced by the lack of Annexin-A2. Consequently, while Annexin-A2 knockout impaired myofiber repair, it reduced endomysial accumulation of exosomes. This reduction in exosome secretion was accompanied by reduced muscle inflammation and degeneration in LGMD2B mice knocked out for Annexin-A2. Our studies identify myofiber injury-triggered exosome release as an important regulator of post-injury inflammatory responses that are altered in LGMD2B. This work further identifies the underlying calcium-dependent fusion machinery and establishes the therapeutic potential of targeting excessive exosome section for muscle diseases associated with poor sarcolemmal repair.