The approved gene therapies for spinal muscular atrophy (SMA), caused by loss of survival motor neuron 1 (SMN1), greatly ameliorate SMA natural history but are not curative. These therapies primarily target motor neurons, but SMN1 loss has detrimental effects beyond motor neurons and especially in muscle. Here we show that SMN loss in mouse skeletal muscle leads to accumulation of dysfunctional mitochondria. Expression profiling of single myofibers from a muscle specific Smn1 knockout mouse model revealed down-regulation of mitochondrial and lysosomal genes. Albeit levels of proteins that mark mitochondria for mitophagy were increased, morphologically deranged mitochondria with impaired complex I and IV activity and respiration and that produced excess reactive oxygen species accumulated in Smn1 knockout muscles, because of the lysosomal dysfunction highlighted by the transcriptional profiling. Amniotic fluid stem cells transplantation that corrects the SMN knockout mouse myopathic phenotype restored mitochondrial morphology and expression of mitochondrial genes. Thus, targeting muscle mitochondrial dysfunction in SMA may complement the current gene therapy.