T he transcriptional coactivator PPARγ coactivator 1α (PGC-1α) is a strong activator of mitochondrial biogenesis and oxidative metabolism. While expression of PGC-1α and many of its mitochondrial target genes are decreased in the skeletal muscle of patients with type 2 diabetes, no causal relationship between decreased PGC-1α expression and abnormal glucose metabolism has been established. To address this question, we generated skeletal muscle–specific PGC-1α knockout mice (MKOs), which developed significantly impaired glucose tolerance but showed normal peripheral insulin sensitivity. Surprisingly, MKOs had expanded pancreatic β cell mass, but markedly reduced plasma insulin levels, in both fed and fasted conditions. Muscle tissue from MKOs showed increased expression of several proinflammatory genes, and these mice also had elevated levels of the circulating IL-6. We further demonstrated that IL-6 treatment of isolated mouse islets suppressed glucose-stimulated insulin secretion. These data clearly illustrate a causal role for muscle PGC-1α in maintenance of glucose homeostasis and highlight an unexpected cytokine-mediated crosstalk between skeletal muscle and pancreatic islets.