The main goal of this study was to investigate the long-term effect of daily 8-hour mild intermittent hypoxia (14-15% O2) on glucose tolerance and muscle morphology of Sprague-Dawley rats. The involvement of AMPK-PGC-1α-VEGF signaling pathways in the skeletal muscle was also determined during the first 8 hours of hypoxia. We found that mRNA levels of VEGF and PGC-1α were significantly increased above control after 8-h mild hypoxia without a change in AMPK phosphorylation. After 8 weeks of mild intermittent hypoxia treatment, plasma glucose and insulin levels in oral glucose tolerance test (OGTT), epididymal fat mass, and body weight were significantly lower compared to the control group. While soleus muscle weight was not changed, capillary and fiber densities in the hypoxia group were 33% and 35% above the control suggesting reorganization of muscle fibers. In conclusion, our data provide strong evidence that long-term mild intermittent hypoxia decreases the diffusion distance of glucose and insulin across muscle fibers, and decreases adiposity in rats. These changes may account for the improved glucose tolerance observed following the 8-week hypoxia treatment, and provides grounds for investigating the development of a mild non-pharmacological intervention in the treatment of obesity and type 2 diabetes.