PGC-1alpha is a transcriptional coactivator that controls energy homeostasis through regulation of glucose and oxidative metabolism. Both PGC-1alpha expression and oxidative capacity are decreased in skeletal muscle of patients and animals undergoing atrophy, suggesting that PGC-1alpha participates in the regulation of muscle mass. PGC-1alpha gene expression is controlled by calcium- and cAMP-sensitive pathways. However, the mechanism regulating PGC-1alpha in skeletal muscle during atrophy remains unclear. Therefore, we examined the mechanism responsible for decreased PGC-1alpha expression using a rodent streptozotocin (STZ) model of chronic diabetes and atrophy. After 21days, the levels of PGC-1alpha protein and mRNA were decreased. We examined the activation state of CREB, a potent activator of PGC-1alpha transcription, and found that phospho-CREB was paradoxically high in muscle of STZ-rats, suggesting that the cAMP pathway was not involved in PGC-1alpha regulation. In contrast, expression of calcineurin (Cn), a calcium-dependent phosphatase, was suppressed in the same muscles. PGC-1alpha expression is regulated by two Cn substrates, MEF2 and NFATc. Therefore, we examined MEF2 and NFATc activity in muscles from STZ-rats. Target genes MRF4 and MCIP1.4 mRNAs were both significantly reduced, consistent with reduced Cn signaling. Moreover, levels of MRF4, MCIP1.4, and PGC-1alpha were also decreased in muscles of CnAalpha-/- and CnAbeta-/- mice without diabetes indicating that decreased Cn signaling, rather than changes in other calcium- or cAMP-sensitive pathways, were responsible for decreased PGC-1alpha expression. These findings demonstrate that Cn activity is a major determinant of PGC-1alpha expression in skeletal muscle during diabetes and possibly other conditions associated with loss of muscle mass.