Background: Obesity has become an epidemic in children, associated with an increase in insulin resistance and metabolic dysfunction. Mitochondrial function is known to be an important determinant of glucose metabolism in adults. However, little is known about the relationship between mitochondrial function and obesity, insulin resistance, energy expenditure, and pubertal development in children. Methods: Seventy-four participants, 37 overweight (≥85th percentile body mass index for age and sex) and 37 normal-weight (<85th percentile) without personal or family history of diabetes mellitus were enrolled. Subjects were evaluated with an oral glucose tolerance test, metabolic markers, resting energy expenditure, Tanner staging, and 31P magnetic resonance spectroscopy of skeletal muscle for mitochondrial function. Results: Overweight and normal-weight children showed no difference in muscle ATP synthesis [phosphocreatine (PCr) recovery after exercise] (32.4 ± 2.3 vs. 34.1 ± 2.1, P = 0.58). However, insulin-resistant children had significantly prolonged PCr recovery when compared with insulin-sensitive children, by homeostasis model assessment for insulin resistance quartile (ANOVA, P = 0.04). Similarly, insulin-resistant overweight children had PCr recovery that was prolonged compared with insulin-sensitive overweight children (P = 0.01). PCr recovery was negatively correlated with resting energy expenditure in multivariate modeling (P = 0.03). Mitochondrial function worsened during mid-puberty in association with insulin resistance. Conclusion: Reduced skeletal muscle mitochondrial oxidative phosphorylation, assessed by PCr recovery, is associated with insulin resistance and an altered metabolic phenotype in children. Normal mitochondrial function may be associated with a healthier metabolic phenotype in overweight children. Further studies are needed to investigate the long-term physiological consequences and potential treatment strategies targeting children with reduced mitochondrial function.