PGC-1α is a key regulator of oxidative metabolism facilitating the expression of genes critical for the function and biogenesis of the two key oxidative organelles, mitochondria and peroxisomes, in skeletal muscle (SKM) and other organs. Our recent studies have found that the transcription factor Bhlhe40 negatively regulates PGC-1α gene expression and its coactivational activity, therefore, this factor should have profound influence on the biogenesis and metabolic activity of mitochondria and peroxisomes. Here we found that both the number and activity of peroxisomes were increased upon knockdown of Bhlhe40 expression but were repressed by its over-expression. Mitochondrial efficiency was significantly reduced by Bhlhe40 knockdown, resulting in the burst of ROS. Over-expression of a constitutively active PGC-1α-interactive domain (named as VBH135) of Bhlhe40 mimicked the effects of its knockdown on peroxisomes but simultaneously reduced ROS level. Furthermore, the efficiency, but not the number, of mitochondria was also increased by VBH135, suggesting differential regulation of peroxisomes and mitochondria by Bhlhe40. Unsaturated fatty acid oxidation, insulin response, and oxidative respiration were highly enhanced in Bhlhe40 knockdown or VBH135 over-expressed cells, suggesting the importance of Bhlhe40 in the regulation of unsaturated fatty acid and glucose oxidative metabolism. Expression profiling of genes important for either organelle also supports differential regulation of peroxisomes and mitochondria by Bhlhe40. These observations have established the important role of Bhlhe40 in SKM oxidative metabolism as the critical regulator of peroxisome and mitochondrion biogenesis and functions, and thus should provide a novel route for developing drugs targeting SKM metabolic diseases.