Estrogen-related receptor γ (ERRγ) regulates the perinatal switch to oxidative metabolism in the myocardium. We wanted to understand the significance of induction of ERRγ expression in skeletal muscle by exercise. Muscle-specific VP16ERRγ transgenic mice demonstrated an increase in exercise capacity, mitochondrial enzyme activity, and enlarged mitochondria despite lower muscle weights. Furthermore, peak oxidative capacity was higher in the transgenics as compared with control littermates. In contrast, mice lacking one copy of ERRγ exhibited decreased exercise capacity and muscle mitochondrial function. Interestingly, we observed that increased ERRγ in muscle generates a gene expression profile that closely overlays that of red oxidative fiber-type muscle. We further demonstrated that a small molecule agonist of ERRβ/γ can increase mitochondrial function in mouse myotubes. Our data indicate that ERRγ plays an important role in causing a shift toward slow twitch muscle type and, concomitantly, a greater capacity for endurance exercise. Thus, the activation of this nuclear receptor provides a potential node for therapeutic intervention for diseases such as obesity, which is associated with reduced oxidative metabolism and a lower type I fiber content in skeletal muscle.