The major objective of this study was to understand the molecular basis of how sarcolipin uncoupling of SERCA regulates muscle oxidative metabolism. Using genetically engineered sarcolipin (SLN) mouse models and primary muscle cells, we demonstrate that SLN plays a crucial role in mitochondrial biogenesis and oxidative metabolism in muscle. Loss of SLN severely compromised muscle oxidative capacity without affecting fiber-type composition. Mice overexpressing SLN in fast-twitch glycolytic muscle reprogrammed mitochondrial phenotype, increasing fat utilization and protecting against high-fat diet-induced lipotoxicity. We show that SLN affects cytosolic Ca²⁺ transients and activates the Ca²⁺/calmodulin-dependent protein kinase II (CamKII) and PGC1α axis to increase mitochondrial biogenesis and oxidative metabolism. These studies provide a fundamental framework for understanding the role of sarcoplasmic reticulum (SR)-Ca²⁺ cycling as an important factor in mitochondrial health and muscle metabolism. We propose that SLN can be targeted to enhance energy expenditure in muscle and prevent metabolic disease.