Friedreich's ataxia (FRDA), the most common inherited ataxia, is characterized by focal neurodegeneration, diabetes mellitus and life-threatening cardiomyopathy. Frataxin, which is significantly reduced in patients with this recessive disorder, is a mitochondrial iron-binding protein, but how its deficiency leads to neurodegeneration and metabolic derangements is not known. We performed microarray analysis of heart and skeletal muscle in a mouse model of frataxin deficiency, and found molecular evidence of increased lipogenesis in skeletal muscle, and alteration of fiber-type composition in heart, consistent with insulin resistance and cardiomyopathy, respectively. Since the peroxisome proliferator-activated receptor gamma (PPARgamma) pathway is known to regulate both processes, we hypothesized that dysregulation of this pathway could play a key role in frataxin deficiency. We confirmed this by showing a coordinate dysregulation of the PPARgamma coactivator Pgc1a and transcription factor Srebp1 in cellular and animal models of frataxin deficiency, and in cells from FRDA patients, who have marked insulin resistance. Finally, we show that genetic modulation of the PPARgamma pathway affects frataxin levels in vitro, supporting PPARgamma as a novel therapeutic target in FRDA.