Key points In skeletal muscle, physical exercise and thyroid hormone mediate the peroxisome proliferator‐activated receptor‐γ coactivator‐1α (PGC‐1a) expression that is crucial to skeletal muscle mitochondrial function. The expression of type 2 deiodinase (D2), which activates thyroid hormone in skeletal muscle is upregulated by acute treadmill exercise through a β‐adrenergic receptor‐dependent mechanism. Pharmacological block of D2 or disruption of the Dio2 gene in skeletal muscle fibres impaired acute exercise‐induced PGC‐1a expression. Dio2 disruption also impaired muscle PGC‐1a expression and mitochondrial citrate synthase activity in chronically exercised mice. Abstract Thyroid hormone promotes expression of peroxisome proliferator‐activated receptor‐γ coactivator‐1α (PGC‐1a), which mediates mitochondrial biogenesis and oxidative capacity in skeletal muscle (SKM). Skeletal myocytes express the type 2 deiodinase (D2), which generates 3,5,3′‐triiodothyronine (T3), the active thyroid hormone. To test whether D2‐generated T3 plays a role in exercise‐induced PGC‐1a expression, male rats and mice with SKM‐specific Dio2 inactivation (SKM‐D2KO or MYF5‐D2KO) were studied. An acute treadmill exercise session (20 min at 70–75% of maximal aerobic capacity) increased D2 expression/activity (1.5‐ to 2.7‐fold) as well as PGC‐1a mRNA levels (1.5‐ to 5‐fold) in rat soleus muscle and white gastrocnemius muscle and in mouse soleus muscle, which was prevented by pretreatment with 1 mg (100 g body weight)−1 propranolol or 6 mg (100 g body weight)−1 iopanoic acid (5.9‐ vs. 2.8‐fold; P < 0.05), which blocks D2 activity . In the SKM‐D2KO mice, acute treadmill exercise failed to induce PGC‐1a fully in soleus muscle (1.9‐ vs. 2.8‐fold; P < 0.05), and in primary SKM‐D2KO myocytes there was only a limited PGC‐1a response to 1 μm forskolin (2.2‐ vs. 1.3‐fold; P < 0.05). Chronic exercise training (6 weeks) increased soleus muscle PGC‐1a mRNA levels (∼25%) and the mitochondrial enzyme citrate synthase (∼20%). In contrast, PGC‐1a expression did not change and citrate synthase decreased by ∼30% in SKM‐D2KO mice. The soleus muscle PGC‐1a response to chronic exercise was also blunted in MYF5‐D2KO mice. In conclusion, acute treadmill exercise increases SKM D2 expression through a β‐adrenergic receptor‐dependent mechanism. The accelerated conversion of T4 to T3 within myocytes mediates part of the PGC‐1a induction by treadmill exercise and its downstream effects on mitochondrial function.