Peroxisome proliferator-activated receptors (PPARs) are nuclear hormone receptors that regulate genes involved in energy metabolism and inflammation. For biological activity, PPARs require cognate lipid ligands, heterodimerization with retinoic X receptors, and coactivation by PPAR-γ coactivator-1α or PPAR-γ coactivator-1β (PGC-1α or PGC-1β, encoded by Ppargc1a and Ppargc1b, respectively). Here we show that lipolysis of cellular triglycerides by adipose triglyceride lipase (patatin-like phospholipase domain containing protein 2, encoded by Pnpla2; hereafter referred to as Atgl) generates essential mediator(s) involved in the generation of lipid ligands for PPAR activation. Atgl deficiency in mice decreases mRNA levels of PPAR-α and PPAR-δ target genes. In the heart, this leads to decreased PGC-1α and PGC-1β expression and severely disrupted mitochondrial substrate oxidation and respiration; this is followed by excessive lipid accumulation, cardiac insufficiency and lethal cardiomyopathy. Reconstituting normal PPAR target gene expression by pharmacological treatment of Atgl-deficient mice with PPAR-α agonists completely reverses the mitochondrial defects, restores normal heart function and prevents premature death. These findings reveal a potential treatment for the excessive cardiac lipid accumulation and often-lethal cardiomyopathy in people with neutral lipid storage disease, a disease marked by reduced or absent ATGL activity.