Mitochondria are organelles that contain their own genomes (mtDNA) however, the majority of the mitochondrial proteome is encoded by nuclear genes and imported into the mitochondria for assembly into various components. Mitochondria adapt metabolism and biomass to changes in cellular protein synthesis rates accompanying growth. The signaling mechanisms that precede or initiate a mitochondrial expansion program to coordinate mitochondria-to-nuclear communication during development is not well-understood. C. elegans undergo long bouts of starvation in their natural environment upon hatching and remain developmentally arrested as L1s (also known as “L1 diapause”) until they encounter food sources. Prolonged L1 diapause leads to manifestation of age-related phenotypes and mitochondrial remodeling. The mitochondrial unfolded protein response (UPRmt) is a transcriptional response mediated by the bZip protein ATFS-1. ATFS-1 scales mitochondrial expansion with protein synthesis during normal development by regulating genes involved in mitochondrial biogenesis. Here, we demonstrate that ATFS-1 is required for growth and establishment of mature germline upon exiting from starvation-induced L1 arrest. Starvation survival as well as mtDNA depletion during L1 arrest is independent of ATFS-1. Interestingly, we found that the mitochondrial-localized function of ATFS-1 is required for the recovery and expansion of mtDNA following feeding. Lastly, we demonstrate that ATFS-1 functions downstream of the insulin-IGF signaling pathway to regulate mtDNA quantity. The insulin receptor DAF-2 senses nutrient fluctuations and hypomorphic mutation in DAF-2 causes an increase in mtDNA level partly regulated by mitochondrial-localized ATFS-1. Together, our data indicate the physiological relevance and significance of UPRmt in recovering mitochondrial mass when growth and development resumes following starvation.