Skeletal muscle mitochondrial dysfunction is hypothesized to contribute to the pathophysiology of insulin resistance and Type 2 diabetes. Whether thiazolidinedione therapy enhances skeletal muscle mitochondrial function as a component of its insulin-sensitizing effect is unknown. To test this, we evaluated skeletal muscle mitochondria and exercise capacity in Type 2 diabetic subjects with otherwise normal cardiopulmonary function in response to rosiglitazone therapy. Twenty-three subjects were treated for 12 wk and underwent pre- and posttherapy metabolic stress testing and skeletal muscle biopsies. Rosiglitazone significantly ameliorated fasting glucose, insulin, and free fatty acid levels but did not augment the subjects' maximal oxygen consumption (Vo(2max)) or their skeletal muscle mitochondrial copy number. The baseline Vo(2max) correlated strongly with muscle mitochondrial copy number (r = 0.56, P = 0.018, n = 17) and inversely with the duration of diabetes (r = -0.67, P = 0.004, n = 23). Despite the global lack of effect of rosiglitazone-mediated insulin sensitization on skeletal muscle mitochondria, subjects with the most preserved functional capacity demonstrated some plasticity in their mitochondria biology as evidenced by an upregulation of electron transfer chain proteins and in citrate synthase activity. This study demonstrates that the augmentation of skeletal muscle mitochondrial electron transfer chain content and/or bioenergetics is not a prerequisite for rosiglitazone-mediated improved insulin sensitivity. Moreover, in diabetic subjects, Vo(2max) reflects the duration of diabetes and skeletal muscle mitochondrial content. It remains to be determined whether longer-term insulin sensitization therapy with rosiglitazone will augment skeletal muscle mitochondrial bioenergetics in those diabetic subjects with relatively preserved basal aerobic capacity.