Key points Transcriptional co‐activator PGC‐1α1 has been shown to regulate energy metabolism and to mediate metabolic adaptations in pathological and physiological cardiac hypertrophy but other functional implications of PGC‐1α1 expression are not known. Transgenic PGC‐1α1 overexpression within the physiological range in mouse heart induces purposive changes in contractile properties, electrophysiology and calcium signalling but does not induce substantial metabolic remodelling. The phenotype of the PGC‐1α1 transgenic mouse heart recapitulates most of the functional modifications usually associated with the exercise‐induced heart phenotype, but does not protect the heart against load‐induced pathological hypertrophy. Transcriptional effects of PGC‐1α1 show clear dose‐dependence with diverse changes in genes in circadian clock, heat shock, excitability, calcium signalling and contraction pathways at low overexpression levels, while metabolic genes are recruited at much higher PGC‐1α1 expression levels. These results imply that the physiological role of PGC‐1α1 is to promote a beneficial excitation–contraction coupling phenotype in the heart. Abstract The transcriptional coactivator PGC‐1α1 has been identified as a central factor mediating metabolic adaptations of the heart. However, to what extent physiological changes in PGC‐1α1 expression levels actually contribute to the functional adaptation of the heart is still mostly unresolved. The aim of this study was to characterize the transcriptional and functional effects of physiologically relevant, moderate PGC‐1α1 expression in the heart. In vivo and ex vivo physiological analysis shows that expression of PGC‐1α1 within a physiological range in mouse heart does not induce the expected metabolic alterations, but instead induces a unique excitation–contraction (EC) coupling phenotype recapitulating features typically seen in physiological hypertrophy. Transcriptional screening of PGC‐1α1 overexpressing mouse heart and myocyte cultures with higher, acute adenovirus‐induced PGC‐1α1 expression, highlights PGC‐1α1 as a transcriptional coactivator with a number of binding partners in various pathways (such as heat shock factors and the circadian clock) through which it acts as a pleiotropic transcriptional regulator in the heart, to both augment and repress the expression of its target genes in a dose‐dependent fashion. At low levels of overexpression PGC‐1α1 elicits a diverse transcriptional response altering the expression state of circadian clock, heat shock, excitability, calcium signalling and contraction pathways, while metabolic targets of PGC‐1α1 are recruited at higher PGC‐1α1 expression levels. Together these findings demonstrate that PGC‐1α1 elicits a dual effect on cardiac transcription and phenotype. Further, our results imply that the physiological role of PGC‐1α1 is to promote a beneficial EC coupling phenotype in the heart.