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Background: There is no evidence to date on whether transcriptional regulators are able to shift the balance between mitochondrial fusion and fission events through selective control of gene expression., Methodology/principal Findings: Here, we demonstrate that reduced mitochondrial size observed in knock-out mice for the transcriptional regulator PGC-1beta is associated with a selective reduction in Mitofusin 2 (Mfn2) expression, a mitochondrial fusion protein. This decrease in Mfn2 is specific since expression of the remaining components of mitochondrial fusion and fission machinery were not affected. Furthermore, PGC-1beta increases mitochondrial fusion and elongates mitochondrial tubules. This PGC-1beta-induced elongation specifically requires Mfn2 as this process is absent in Mfn2-ablated cells. Finally, we show that PGC-1beta increases Mfn2 promoter activity and transcription by coactivating the nuclear receptor Estrogen Related Receptor alpha (ERRalpha)., Conclusions/significance: Taken together, our data reveal a novel mechanism by which mammalian cells control mitochondrial fusion. In addition, we describe a novel role of PGC-1beta in mitochondrial physiology, namely the control of mitochondrial fusion mainly through Mfn2.