Maintaining muscle size and fiber composition requires contractile activity. Increased activity stimulates expression of the transcriptional coactivator PGC-1α (peroxisome proliferator-activated receptor γ coactivator 1α), which promotes fiber-type switching from glycolytic toward more oxidative fibers. In response to disuse or denervation, but also in fasting and many systemic diseases, muscles undergo marked atrophy through a common set of transcriptional changes. FoxO family transcription factors play a critical role in this loss of cell protein, and when activated, FoxO3 causes expression of the atrophy-related ubiquitin ligases atrogin-1 and MuRF-1 and profound loss of muscle mass. To understand how exercise might retard muscle atrophy, we investigated the possible interplay between PGC-1α and the FoxO family in regulation of muscle size. Rodent muscles showed a large decrease in PGC-1α mRNA during atrophy induced by denervation as well as by cancer cachexia, diabetes, and renal failure. Furthermore, in transgenic mice overexpressing PGC-1α, denervation and fasting caused a much smaller decrease in muscle fiber diameter and a smaller induction of atrogin-1 and MuRF-1 than in control mice. Increased expression of PGC-1α also increased mRNA for several genes involved in energy metabolism whose expression decreases during atrophy. Transfection of PGC-1α into adult fibers reduced the capacity of FoxO3 to cause fiber atrophy and to bind to and transcribe from the atrogin-1 promoter. Thus, the high levels of PGC-1α in dark and exercising muscles can explain their resistance to atrophy, and the rapid fall in PGC-1α during atrophy should enhance the FoxO-dependent loss of muscle mass.