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Facioscapulohumeral muscular dystrophy (FSHD) is caused by sporadic misexpression of the transcription factor double homeobox 4 (DUX4) in skeletal muscles. So far, monolayer cultures and animal models have been used to study the FSHD disease mechanism and for FSHD therapy development, but these models do not fully recapitulate the disease and there is a lack of knowledge on how DUX4 misexpression leads to skeletal muscle dysfunction. To overcome these barriers, we have developed a three-dimensional tissue engineered skeletal muscle (3D-TESM) model by generating genetically matched myogenic progenitors (MPs) from human induced pluripotent stem cells of three mosaic FSHD patients. 3D-TESMs derived from genetically affected MPs recapitulate pathological features including DUX4 and DUX4 target gene expression, smaller myofiber diameters, and reduced absolute forces upon electrical stimulation. RNA sequencing data illustrates increased expression of DUX4 target genes in 3D-TESMs compared to two-dimensional (2D) myotubes, and cellular differentiation was improved by 3D culture conditions. Treatment of 3D-TESMs with three different small molecules identified in drug development screens in 2D muscle cultures showed no improvements, and sometimes even declines, in contractile force and sarcomere organization. These results suggest that these compounds either have a detrimental effect on the formation of 3D-TESMs, an effect that might have been overlooked or was challenging to detect in 2D cultures and in vivo models, and/or that further development of the 3D-TESM model is needed. In conclusion, we have developed a 3D skeletal muscle model for FSHD that can be employed for preclinical research focusing on DUX4 expression and downstream pathways of FSHD in relation to contractile properties. In the future, we expect that this model can also be used for preclinical drug screening., (© The Author(s) 2024. Published by Oxford University Press on behalf of the Guarantors of Brain.)