Purpose: Perturbations in body weight have been shown to affect energy expenditure and efficiency during physical activity. The separate effects of weight loss and exercise training on exercise efficiency or the proportion of energy derived from fat oxidation during physical activity, however, are not known. The purpose of this study was to determine the separate and combined effects of exercise training and weight loss on metabolic efficiency, economy and fat oxidation during steady state moderate submaximal exercise. Methods: 64 sedentary older (67±.5) overweight to obese (30.7±.4kg/m²) volunteers completed four months of either diet induced weight loss (WL,n=11), exercise training (EX,n=36) or the combination of both interventions (WLEX,n=17). Energy expenditure, gross efficiency (GE), economy (EC) and proportion of energy expended from fat (EF) were determined during a one-hour submaximal (50% of VO₂peak) cycle ergometry exercise before the intervention and at the same absolute work rate after the intervention. Results: EX increased GE by 4.7±2.2%. EC was similarly increased by 4.2±2.1% by EX. The addition of concomitant WL to EX (WLEX) resulted in greater increases in GE (9.0±3.3%) compared to WL alone but not compared to EX alone. These effects remained after adjusting for changes in LBM. The proportion of energy derived from fat during the bout of moderate exercise increased with EX and WLEX but not with WL. Conclusion: Exercise training, either alone or in combination with weight loss, increases both exercise efficiency and the utilization of fat during moderate physical activity in previously sedentary, obese older adults. Weight loss alone, however, neither significantly improves efficiency nor utilization of fat during exercise.