The orphan nuclear receptor estrogen-related receptor (ERR) alpha is a downstream effector of the transcriptional coactivator PGC-1alpha in the regulation of genes important for mitochondrial oxidative capacity. PGC-1alpha is also a potent activator of the transcriptional program required for hepatic gluconeogenesis, and in particular of the key gluconeogenic enzyme phosphoenolpyruvate carboxykinase (PEPCK). We report here that the regulatory sequences of the PEPCK gene harbor a functional ERRalpha binding site. However, in contrast to the co-stimulating effects of ERRalpha and PGC-1alpha on mitochondrial gene expression, ERRalpha acts as a transcriptional repressor of the PEPCK gene. Suppression of ERRalpha expression by small interfering RNA leads to reduced binding of ERRalpha to the endogenous PEPCK gene, and an increase in promoter occupancy by PGC-1alpha, suggesting that part of the ERRalpha function at this gene is to antagonize the action of PGC-1alpha. In agreement with the in vitro studies, animals that lack ERRalpha show increased expression of gluconeogenic genes, including PEPCK and glycerol kinase, but decreased expression of mitochondrial genes, such as ATP synthase subunit beta and cytochrome c-1. Our findings suggest that ERRalpha has opposing effects on genes important for mitochondrial oxidative capacity and gluconeogenesis. The different functions of ERRalpha in the regulation of these pathways suggest that enhancing ERRalpha activity could have beneficial effects on glucose metabolism in diabetic subjects by two distinct mechanisms: increasing mitochondrial oxidative capacity in peripheral tissues and liver, and suppressing hepatic glucose production.