Ischaemia of the heart, brain and limbs is a leading cause of morbidity and mortality worldwide. Hypoxia stimulates the secretion of vascular endothelial growth factor (VEGF) and other angiogenic factors, leading to neovascularization and protection against ischaemic injury. Here we show that the transcriptional coactivator PGC-1alpha (peroxisome-proliferator-activated receptor-gamma coactivator-1alpha), a potent metabolic sensor and regulator, is induced by a lack of nutrients and oxygen, and PGC-1alpha powerfully regulates VEGF expression and angiogenesis in cultured muscle cells and skeletal muscle in vivo. PGC-1alpha-/- mice show a striking failure to reconstitute blood flow in a normal manner to the limb after an ischaemic insult, whereas transgenic expression of PGC-1alpha in skeletal muscle is protective. Surprisingly, the induction of VEGF by PGC-1alpha does not involve the canonical hypoxia response pathway and hypoxia inducible factor (HIF). Instead, PGC-1alpha coactivates the orphan nuclear receptor ERR-alpha (oestrogen-related receptor-alpha) on conserved binding sites found in the promoter and in a cluster within the first intron of the VEGF gene. Thus, PGC-1alpha and ERR-alpha, major regulators of mitochondrial function in response to exercise and other stimuli, also control a novel angiogenic pathway that delivers needed oxygen and substrates. PGC-1alpha may provide a novel therapeutic target for treating ischaemic diseases.