High capacity mitochondrial ATP production is essential for normal function of the adult heart, and evidence is emerging that mitochondrial derangements occur in common myocardial diseases. Previous overexpression studies have shown that the inducible transcriptional coactivator peroxisome proliferator-activated receptor coactivator-1 (PGC-1) is capable of activating postnatal cardiac myocyte mitochondrial biogenesis. Recently, we generated mice with deficiency of PGC-1 (PGC-1-/- mice) which survive with modestly blunted postnatal cardiac growth. To determine if PGC-1 is essential for normal cardiac energy metabolic capacity, mitochondrial function studies were performed on saponin-permeabilized myocardial fibers from PGC-1-/- mice. These studies demonstrated reduced maximal (State 3) palmitoyl-L-carnitine respiration and increased maximal (State 3) pyruvate respiration in PGC-1-/- mice compared to PGC-1+/+ controls. ATP synthesis rates obtained during maximal (State 3) respiration in permeabilized myocardial fibers were reduced for PGC-1-/- mice, while ATP/O, a measure of metabolic efficiency (ATP produced per oxygen consumed), was decreased by 58% for PGC-1-/- fibers. Ex vivo isolated working heart studies demonstrated that PGC-1-/- mice exhibit lower cardiac power, reduced palmitate oxidation, and increased reliance on glucose oxidation - the latter likely a compensatory response. ¹³C-NMR revealed that hearts from PGC-1-/- mice exhibited limited capacity to recruit triglyceride as a source for lipid oxidation during -adrenergic challenge. Consistent with reduced mitochondrial fatty acid oxidative enzyme gene expression, total triglyceride content was greater in hearts of PGC-1-/- mice relative to PGC-1+/+ following a fast. Overall, these results demonstrate that PGC-1 is essential for maintenance of maximal, efficient cardiac mitochondrial fatty acid oxidation, ATP synthesis, and myocardial lipid homeostasis.