AimTo determine the effect of pioglitazone treatment on in vivo and ex vivo muscle mitochondrial function in a rat model of diabetes.MethodsBoth the lean, healthy rats and the obese, diabetic rats are Zucker Diabetic Fatty (ZDF) rats. The homozygous fa/fa ZDF rats are obese and diabetic. The heterozygous fa/+ ZDF rats are lean and healthy. Diabetic Zucker Diabetic Fatty rats were treated with either pioglitazone (30 mg/kg/day) or water as a control (n = 6 per group), for 2 weeks. In vivo 1H and 31P magnetic resonance spectroscopy was performed on skeletal muscle to assess intramyocellular lipid (IMCL) content and muscle oxidative capacity, respectively. Ex vivo muscle mitochondrial respiratory capacity was evaluated using high‐resolution respirometry. In addition, several markers of mitochondrial content were determined.ResultsIMCL content was 14‐fold higher and in vivo muscle oxidative capacity was 26% lower in diabetic rats compared with lean rats, which was, however, not caused by impairments of ex vivo mitochondrial respiratory capacity or a lower mitochondrial content. Pioglitazone treatment restored in vivo muscle oxidative capacity in diabetic rats to the level of lean controls. This amelioration was not accompanied by an increase in mitochondrial content or ex vivo mitochondrial respiratory capacity, but rather was paralleled by an improvement in lipid homeostasis, that is lowering of plasma triglycerides and muscle lipid and long‐chain acylcarnitine content.ConclusionDiminished in vivo muscle oxidative capacity in diabetic rats results from mitochondrial lipid overload and can be alleviated by redirecting the lipids from the muscle into adipose tissue using pioglitazone treatment.