Diabetes and obesity are characterised by an impairment in mitochondrial function resulting in a decrease in glucose and fatty acid oxidation, respiration and an increase in intramuscular triglycerides (IMTGs) and insulin resistance. Peroxisome proliferator-activated receptor (PPAR)-γ coactivator 1α (PGC-1α) is a nuclear transcriptional coactivator which regulates several important metabolic processes including, mitochondrial biogenesis, adaptive thermogenesis, respiration, insulin secretion and gluconeogenesis. In addition, PGC-1α has been shown to increase the percentage of oxidative type I muscle fibres, with the latter responsible for the majority of insulin stimulated glucose uptake. PGC-1α also co-activates PPARs α, β/δ and γ which are important transcription factors of genes regulating lipid and glucose metabolism. Exercise causes mitochondrial biogenesis, improves skeletal muscle fatty acid oxidation capacity and insulin sensitivity, therefore making it an important intervention for the treatment of insulin resistance. The expression of PGC-1α mRNA is reduced in diabetic subjects, however, it is rapidly induced in response to interventions which signal alterations in metabolic requirements, such as exercise. Because of the important role of PGC-1α in the control of energy metabolism and insulin sensitivity, it is seen as a candidate factor in the etiology of type 2 diabetes and a drug target for its therapeutic treatment.