Mitochondria within skeletal muscle cells are considered to be located either between the muscle contractile apparatus (interfibrillar mitochondria, IFM) or in large pools beneath the cell membrane (subsarcolemmal mitochondria, SSM), with several structural and functional differences reported between IFM and SSM. However, recent 3D imaging studies suggest that proximity to capillaries embedded in sarcolemmal grooves, rather than proximity to the sarcolemma itself, may drive the accumulation of mitochondria near the cell periphery (paravascular mitochondria, PVM). To evaluate the impact of capillary versus sarcolemmal proximity, we compared the structure and function of skeletal muscle mitochondria located either in large pools lateral to embedded capillaries (PVM), adjacent to the sarcolemma but not in PVM pools (SSM), or interspersed between sarcomeres (IFM). Mitochondrial morphology and interactions were assessed by 3D electron microscopy coupled with machine learning segmentation while mitochondrial energy conversion was assessed by two-photon microscopy of mitochondrial membrane potential, content, calcium, NADH redox and flux in live, intact cells. Structurally, while PVM and SSM were similarly larger than IFM, PVM were more compact and had greater mitochondrial connectivity compared to both IFM and SSM. Functionally, PVM had similar or greater basal NADH flux compared to SSM and IFM, respectively, despite a more oxidized NADH pool and a greater membrane potential, signifying a greater activation of the electron transport chain in PVM. Together, these data indicate proximity to capillaries has a greater impact on mitochondrial energy conversion and distribution in skeletal muscle than the sarcolemma alone.