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Regeneration of skeletal muscle after volumetric injury is thought to be impaired by a dysregulated immune microenvironment that hinders endogenous repair mechanisms. Such defects result in fatty infiltration, tissue scarring, chronic inflammation, and debilitating functional deficits. Here, we evaluated the key cellular processes driving dysregulation in the injury niche through localized modulation of sphingosine‐1‐phosphate (S1P) receptor signaling. We employ dimensionality reduction and pseudotime analysis on single cell cytometry data to reveal heterogeneous immune cell subsets infiltrating preclinical muscle defects due to S1P receptor inhibition. We show that global knockout of S1P receptor 3 (S1PR3) is marked by an increase of muscle stem cells within injured tissue, a reduction in classically activated relative to alternatively activated macrophages, and increased bridging of regenerating myofibers across the defect. We found that local S1PR3 antagonism via nanofiber delivery of VPC01091 replicated key features of pseudotime immune cell recruitment dynamics and enhanced regeneration characteristic of global S1PR3 knockout. Our results indicate that local S1P receptor modulation may provide an effective immunotherapy for promoting a proreparative environment leading to improved regeneration following muscle injury.