ABSTRACT While mitochondria in different tissues have distinct preferences for energy sources, they are flexible in utilizing competing substrates for metabolism according to physiological and nutritional circumstances. However, the regulatory mechanisms and significance of metabolic flexibility are not completely understood. Here we report that the deletion of PTPMT1, a mitochondria-based phosphatase, critically alters mitochondrial fuel selection – the utilization of pyruvate, a key mitochondrial substrate derived from glucose (the major simple carbohydrate), is inhibited, whereas the fatty acid utilization is enhanced. PTPMT1 knockout does not impact the development of the skeletal muscle or heart. However, the metabolic inflexibility ultimately leads to muscular atrophy, heart failure, and sudden death. Mechanistic analyses reveal that the prolonged substrate shift from carbohydrates to lipids causes oxidative stress and mitochondrial destruction, which in turn results in marked accumulation of lipids and profound damage in the knockout muscle cells and cardiomyocytes. Interestingly, PTPMT1 deletion from the liver or adipose tissue does not generate any local or systemic defects. These findings suggest that PTPMT1 plays an important role in maintaining mitochondrial flexibility and that their balanced utilization of carbohydrates and lipids is essential for both the skeletal muscle and the heart despite the two tissues having different preferred energy sources.