Mitochondrial dynamics is a conserved process by which mitochondria undergo repeated cycles of fusion and fission, leading to exchange of mitochondrial genetic content, ions, metabolites, and proteins. Here, we examine the role of the mitochondrial fusion protein optic atrophy 1 (OPA1) in differentiated skeletal muscle by reducing OPA1 gene expression in an inducible manner. OPA1 deficiency in young mice results in non‐lethal progressive mitochondrial dysfunction and loss of muscle mass. Mutant mice are resistant to age‐ and diet‐induced weight gain and insulin resistance, by mechanisms that involve activation of ER stress and secretion of fibroblast growth factor 21 (FGF21) from skeletal muscle, resulting in increased metabolic rates and improved whole‐body insulin sensitivity. OPA1‐elicited mitochondrial dysfunction activates an integrated stress response that locally induces muscle atrophy, but via secretion of FGF21 acts distally to modulate whole‐body metabolism.