A shift in energy substrate utilization from fatty acids to glucose has been reported in failing hearts, resulting in improved oxygen efficiency, yet perhaps also contributing to a state of energy deficiency. PPAR, the principal transcriptional regulator of cardiac fatty acid -oxidation (FAO) genes, is down regulated in heart failure and this may contribute to reduced fatty acid utilization. Cardiomyopathic states are also accompanied by elevated levels of circulating cytokines, such as tumor necrosis factor (TNF), as well as increased local production of cytokines and pro-fibrotic factors, such as TGF. However, whether these molecular pathways directly modulate cardiac energy metabolism and PPAR activity is not known. Therefore, FAO capacity and FAO gene expression were determined in mice with cardiac-restricted over expression of TNF (MHCsTNF₃). MHCsTNF₃ hearts had significantly lower FAO capacity and decreased expression of PPAR and FAO target genes compared to control hearts. Surprisingly, TNF had little effect on PPAR activity and FAO rates in cultured ventricular myocytes, suggesting that TNF acts indirectly on myocyte FAO in vivo. We found that TGF expression was upregulated in MHCsTNF₃ hearts and that treatment of cultured myocytes with TGF significantly suppressed FAO rates and directly impaired PPAR activity, a result reproduced by Smad3 over expression. This work demonstrates that TGF signaling pathways directly suppress PPAR activity and reduce FAO in cardiac myocytes, perhaps in response to locally elevated TNF. Although speculative, TGF driven repair mechanisms may also include the additional benefit of limiting FAO in injured myocardium.