The current study was undertaken to address responsiveness of skeletal muscle mitochondrial electron transport chain (ETC) activity to weight loss (WL) and exercise in overweight or obese, sedentary volunteers. Fourteen middle-aged participants (7 male/7 female) had assessments of mitochondrial ETC activity and mitochondrial (mt)DNA in vastus lateralis muscle, obtained by percutaneous biopsy, before and after a 16-wk intervention. Mean WL was 9.7 (1.5%) and the mean increase in V̇o_{2 max} was [means (SD)] 21.7 (3.7)%. Total ETC activity increased significantly, from 0.13 (0.02) to 0.19 (0.03) U/mU creatine kinase (CK; P < 0.001). ETC activity was also assessed in mitochondria isolated into subsarcolemmal (SSM) and intermyofibrillar (IMF-M) fractions. In response to intervention, there was a robust increase of ETC activity in SSM (0.028 (0.007) to 0.046 (0.011) U/mU CK, P < 0.001), and in IMF-M [0.101 (0.015) to 0.148 (0.018) U/mU CK, P < 0.005]. At baseline, the percentage of ETC activity contained in the SSM fraction was low and remained unchanged following intervention [19 vs. 22 %], despite the increase in ETC activity. Also, muscle mtDNA content did not change significantly [1665 (213) vs. 1874 (214) mtDNA/nuclear DNA], denoting functional improvement rather than proliferation of mitochondria as the principal mechanism of enhanced ETC activity. Increases in ETC activity were correlated with energy expenditure during exercise sessions, and ETC activity in SSM correlated with insulin sensitivity after adjustment for V̇o_{2 max}. In summary, skeletal muscle ETC activity is increased by WL and exercise in previously sedentary obese men and women. We conclude that improved skeletal muscle ETC activity following moderate WL and improved aerobic capacity contributes to associated alleviation of insulin resistance.