Propofol is a commonly used general anesthetic in patient care. Recent studies have shown that propofol has neurological side effects especially in young children, which raises a concern regarding the safety of its use. We explored the effects of the molecular mechanism of propofol on neuronal mitochondrial function in SH-SY5Y cells. Our results demonstrate that clinically relevant doses of propofol reduce the expression of peroxisome proliferator-activated receptor-γ coactivator-1α (PGC-1α) in a dose- and time-dependent manner. At a concentration of 2%, propofol suppresses the mitochondrial regulator nuclear respiratory factor 1 and mitochondrial transcription factor A and impairs neuronal mitochondrial biogenesis. These impairments involve reduction of mitochondrial mass and reduction of the ratio of mitochondrial to nuclear DNA as well as reduction of cytochrome C oxidase activity. Propofol treatment reduces intracellular adenosine triphosphate (ATP) production, the mitochondrial respiratory rate, and increases mitochondrial reactive oxygen species production, implying that it disturbs neuronal mitochondrial function. Overexpression of PGC-1α rescued propofol-induced reduced mitochondrial mass, ATP production, and respiratory rate, indicating that PGC-1α is the mediator of the effect of propofol on mitochondrial function. Finally, we demonstrate that propofol suppresses PGC-1α by inhibiting cAMP-response element binding protein (CREB) activation and promoting PKA RI expression, and the addition of cyclic adenosine monophosphate rescues propofol-mediated reduced PGC-1α. In conclusion, PGC-1α is the central mediator of propofol-induced impairment of mitochondrial biogenesis and neuronal mitochondrial dysfunction. Our study demonstrates the molecular mechanism behind propofol-induced neurotoxicity and provides valuable information regarding its side effects in clinical practice.