Oxidative metabolism is the predominant energy source for aerobic muscle contraction in adult animals. How the cellular and molecular components that support aerobic muscle physiology are put in place during development through their transcriptional regulation is not well understood. Using the Drosophila flight muscle model, we show that the formation of mitochondria cristae harbouring the respiratory chain is concomitant with a large-scale transcriptional upregulation of genes linked with oxidative phosphorylation (OXPHOS) during specific stages of flight muscle development. We further demonstrate using high-resolution imaging, transcriptomic and biochemical analyses that Motif-1-binding protein (M1BP) transcriptionally regulates the expression of genes encoding critical components for OXPHOS complex assembly and integrity. In the absence of M1BP function, the quantity of assembled mitochondrial respiratory complexes is reduced and OXPHOS proteins aggregate in the mitochondrial matrix, triggering a strong protein quality control response. This results in isolation of the aggregate from the rest of the matrix by multiple layers of the inner mitochondrial membrane, representing a previously undocumented mitochondrial stress response mechanism. Together, this study provides mechanistic insight into the transcriptional regulation of oxidative metabolism during Drosophila development and identifies M1BP as a critical player in this process.