Macroautophagy (MA) regulates cellular quality control and energy balance. For example, loss of MA in aP2-positive adipocytes converts white adipose tissue (WAT) into brown adipose tissue (BAT)-like, enhancing BAT function and thereby insulin sensitivity. However, whether MA regulates early BAT development is unknown. We report that deleting Atg7 in myogenic Myf5+ progenitors inhibits MA in Myf5-cell-derived BAT and muscle. Knock out (KO) mice have defective BAT differentiation and function. Surprisingly, their body temperature is higher due to WAT lipolysis-driven increases in fatty acid oxidation in 'Beige' cells in inguinal WAT, BAT and muscle. KO mice also present impaired muscle differentiation, reduced muscle mass and glucose intolerance. Our studies show that ATG7 in Myf5+ progenitors is required to maintain energy and glucose homeostasis through effects on BAT and muscle development. Decreased MA in myogenic progenitors with age and/or overnutrition might contribute to the metabolic defects and sarcopenia observed in these conditions.