We have previously reported that the expression of mitochondrial deacetylase SIRT3 is high in the slow oxidative muscle and that the expression of muscle SIRT3 level is increased by dietary restriction or exercise training. To explore the function of SIRT3 in skeletal muscle, we report here the establishment of a transgenic mouse model with muscle-specific expression of the murine SIRT3 short isoform (SIRT3M3). Calorimetry study revealed that the transgenic mice had increased energy expenditure and lower respiratory exchange rate (RER), indicating a shift towards lipid oxidation for fuel usage, compared to control mice. The transgenic mice exhibited better exercise performance on treadmills, running 45% further than control animals. Moreover, the transgenic mice displayed higher proportion of slow oxidative muscle fibers, with increased muscle AMPK activation and PPARδ expression, both of which are known regulators promoting type I muscle fiber specification. Surprisingly, transgenic expression of SIRT3M3 reduced muscle mass up to 30%, likely through an up-regulation of FOXO1 transcription factor and its downstream atrophy gene MuRF-1. In summary, these results suggest that SIRT3 regulates the formation of oxidative muscle fiber, improves muscle metabolic function, and reduces muscle mass, changes that mimic the effects of caloric restriction.