Despite growing interest and a recent surge in papers, the role of autophagy in glucose and lipid metabolism is unclear. We produced mice with skeletal muscle-specific deletion of Atg7 (encoding autophagy-related 7). Unexpectedly, these mice showed decreased fat mass and were protected from diet-induced obesity and insulin resistance; this phenotype was accompanied by increased fatty acid oxidation and browning of white adipose tissue (WAT) owing to induction of fibroblast growth factor 21 (Fgf21). Mitochondrial dysfunction induced by autophagy deficiency increased Fgf21 expression through induction of Atf4, a master regulator of the integrated stress response. Mitochondrial respiratory chain inhibitors also induced Fgf21 in an Atf4-dependent manner. We also observed induction of Fgf21, resistance to diet-induced obesity and amelioration of insulin resistance in mice with autophagy deficiency in the liver, another insulin target tissue. These findings suggest that autophagy deficiency and subsequent mitochondrial dysfunction promote Fgf21 expression, a hormone we consequently term a 'mitokine', and together these processes promote protection from diet-induced obesity and insulin resistance.