Type-2 diabetes results from the development of insulin resistance and a concomitant impairment of insulin secretion. Recent studies place altered mitochondrial oxidative phosphorylation (OxPhos) as an underlying genetic element of insulin resistance. However, the causative or compensatory nature of these OxPhos changes has yet to be proven. Here, we show that muscle- and liver-specific AIF ablation in mice initiates a pattern of OxPhos deficiency closely mimicking that of human insulin resistance, and contrary to current expectations, results in increased glucose tolerance, reduced fat mass, and increased insulin sensitivity. These results are maintained upon high-fat feeding and in both genetic mosaic and ubiquitous OxPhos-deficient mutants. Importantly, the effects of AIF on glucose metabolism are acutely inducible and reversible. These findings establish that tissue-specific as well as global OxPhos defects in mice can counteract the development of insulin resistance, diabetes, and obesity.