Skeletal muscle insulin resistance, decreased phosphatidylinositol 3-kinase (PI3K) activation and altered mitochondrial function are hallmarks of type 2 diabetes. To determine the relationship between these abnormalities, we created mice with muscle-specific knockout of the p110α or p110β catalytic subunits of PI3K. We find that mice with muscle-specific knockout of p110α, but not p110β, display impaired insulin signaling and reduced muscle size due to enhanced proteasomal and autophagic activity. Despite insulin resistance and muscle atrophy, M-p110αKO mice show decreased serum myostatin, increased mitochondrial mass, increased mitochondrial fusion, and increased PGC1α expression, especially PCG1α2 and PCG1α3. This leads to enhanced mitochondrial oxidative capacity, increased muscle NADH content, and higher muscle free radical release measured in vivo using pMitoTimer reporter. Thus, p110α is the dominant catalytic isoform of PI3K in muscle in control of insulin sensitivity and muscle mass, and has a unique role in mitochondrial homeostasis in skeletal muscle.