Inflammation is a major cause of skeletal muscle atrophy in various diseases. 2-Hydroxy-4′-methoxychalcone (AN07) is a chalcone-based peroxisome-proliferator-activated receptor gamma (PPARγ) agonist with various effects, such as antiatherosclerosis, anti-inflammation, antioxidative stress, and neuroprotection. In this study, we examined the effects of AN07 on protein homeostasis pathway and mitochondrial function in inflammation-associated myotube atrophy induced by lipopolysaccharides (LPS). We found that AN07 significantly attenuated NF-κB activation, inflammatory factors (TNF-α, IL-1β, COX-2, and PGE2), Nox4 expression, and reactive oxygen species levels in LPS-treated C2C12 myotubes. Moreover, AN07 increased SOD2 expression and improved mitochondrial function, including mitochondrial membrane potential and mitochondrial oxygen consumption rate. We also demonstrated that AN07 attenuated LPS-induced reduction of myotube diameter, MyHC expression, and IGF-1/IGF-1R/p-Akt-mediated protein synthesis signaling. Additionally, AN07 downregulated LPS-induced autophagy–lysosomal protein degradation molecules (LC3-II/LC3-I and degraded p62) and ubiquitin–proteasome protein degradation molecules (n-FoxO1a/MuRF1/atrogin-1). However, the regulatory effects of AN07 on protein synthesis and degradation signaling were inhibited by the IGF-1R inhibitor AG1024 and the PI3K inhibitor wortmannin. In addition, the PPARγ antagonist GW9662 attenuated the effects of AN07 against LPS-induced inflammation, oxidation, and protein catabolism. In conclusion, our findings suggest that AN07 possesses protective effects on inflammation-induced myotube atrophy and mitochondrial dysfunction.