The indication for testosterone therapy in aging hypogonadal men without hypothalamic, pituitary, or testicular disease remains to be elucidated. The aim of this study was to investigate the effect of testosterone therapy on insulin sensitivity, substrate metabolism, body composition, and lipids in aging men with low normal bioavailable testosterone levels using a predefined cutoff level for bioavailable testosterone. A randomized, double-blinded, placebo-controlled study of testosterone treatment (gel) was done on 38 men, aged 60-78 years, with bioavailable testosterone 94 cm. Insulin-stimulated glucose disposal (Rd) and substrate oxidation were assessed by euglycemic hyperinsulinemic clamps combined with indirect calorimetry. Lean body mass (LBM) and total fat mass (TFM) were measured by dual x-ray absorptiometry, and serum total testosterone was measured by tandem mass spectrometry. Bioavailable testosterone was calculated. Coefficients (b) represent the placebo-controlled mean effect of intervention. LBM (b = 1.9 kg, p = 0.003) increased while HDL-cholesterol (b = -0.12 mmol/l, p = 0.043) and TFM decreased (b = -1.2 kg, p = 0.038) in the testosterone group compared to placebo. Basal lipid oxidation (b = 5.65 mg/min/m(2), p = 0.045) increased and basal glucose oxidation (b = -9.71 mg/min/m(2), p = 0.046) decreased in response to testosterone therapy even when corrected for changes in LBM. No significant changes in insulin-stimulated Rd was observed (b = -0.01mg/min/m(2), p = 0.92). Testosterone therapy increased muscle mass and lipid oxidation in aging men with low normal bioavailable testosterone levels; however, our data did not support an effect of testosterone on whole-body insulin sensitivity using the euglycemic hyperinsulinemic clamp technique.