PGC-1α is a transcriptional coactivator promoting oxidative metabolism in many tissues. Its expression in skeletal muscle (SKM) is induced by hypoxia and reactive oxidative species (ROS) generated during exercise, suggesting that PGC-1α might mediate the cross talk between oxidative metabolism and cellular responses to hypoxia and ROS. Here we found that PGC-1α directly interacted with Bhlhe40, a basic helix-loop-helix (bHLH) transcriptional repressor induced by hypoxia, and protects SKM from ROS damage, and they cooccupied PGC-1α-targeted gene promoters/enhancers, which in turn repressed PGC-1α transactivational activity. Bhlhe40 repressed PGC-1α activity through recruiting histone deacetylases (HDACs) and preventing the relief of PGC-1α intramolecular repression caused by its own intrinsic suppressor domain. Knockdown of Bhlhe40 mRNA increased levels of ROS, fatty acid oxidation, mitochondrial DNA, and expression of PGC-1α target genes. Similar effects were also observed when the Bhlhe40-mediated repression was rescued by a dominantly active form of the PGC-1α-interacting domain (PID) from Bhlhe40. We further found that Bhlhe40-mediated repression can be largely relieved by exercise, in which its recruitment to PGC-1α-targeted cis elements was significantly reduced. These observations suggest that Bhlhe40 is a novel regulator of PGC-1α activity repressing oxidative metabolism gene expression and mitochondrion biogenesis in sedentary SKM.