Skeletal muscle plays a key role in systemic energy homeostasis besides its contractile function, but what links these functions is poorly defined. Protein Arginine Methyl Transferase 5 (PRMT5) is a well-known oncoprotein but also expressed in healthy tissues with unclear physiological functions. As adult muscles express high levels of Prmt5, we generated skeletal muscle-specific Prmt5 knockout (Prmt5 ) mice. We observe reduced muscle mass, oxidative capacity, force production, and exercise performance in Prmt5 mice. The motor deficiency is associated with scarce lipid droplets in myofibers due to defects in lipid biosynthesis and accelerated degradation. Specifically, PRMT5 deletion reduces dimethylation and stability of Sterol Regulatory Element-Binding Transcription Factor 1a (SREBP1a), a master regulator of de novo lipogenesis. Moreover, Prmt5 impairs the repressive H4R3 symmetric dimethylation at the Pnpla2 promoter, elevating the level of its encoded protein ATGL, the rate-limiting enzyme catalyzing lipolysis. Accordingly, skeletal muscle-specific double knockout of Pnpla2 and Prmt5 normalizes muscle mass and function. Together, our findings delineate a physiological function of PRMT5 in linking lipid metabolism to contractile function of myofibers.