Induction of heat shock protein (HSP)72 protects against obesity-induced insulin resistance, but the underlying mechanisms are unknown. Here, we show that HSP72 plays a pivotal role in increasing skeletal muscle mitochondrial number and oxidative metabolism. Mice overexpressing HSP72 in skeletal muscle (HSP72Tg) and control wild-type (WT) mice were fed either a chow or high-fat diet (HFD). Despite a similar energy intake when HSP72Tg mice were compared with WT mice, the HFD increased body weight, intramuscular lipid accumulation (triacylglycerol and diacylglycerol but not ceramide), and severe glucose intolerance in WT mice alone. Whole-body VO2, fatty acid oxidation, and endurance running capacity were markedly increased in HSP72Tg mice. Moreover, HSP72Tg mice exhibited an increase in mitochondrial number. In addition, the HSP72 coinducer BGP-15, currently in human clinical trials for type 2 diabetes, also increased mitochondrial number and insulin sensitivity in a rat model of type 2 diabetes. Together, these data identify a novel role for activation of HSP72 in skeletal muscle. Thus, the increased oxidative metabolism associated with activation of HSP72 has potential clinical implications not only for type 2 diabetes but also for other disorders where mitochondrial function is compromised.