Testosterone (T) therapy for hypogonadal men should correct the clinical abnormalities of T deficiency, including improvement of sexual function, increase in muscle mass and strength, and decrease in fat mass, with minimal adverse effects. We have shown that administration of a new transdermal T gel formulation to hypogonadal men provided dose proportional increases in serum T levels to the normal adult male range. We now report the effects of 180 days of treatment with this 1% T gel preparation (50 or 100 mg/day, contained in 5 or 10 g gel, respectively) compared to those of a permeation-enhanced T patch (5 mg/day) on defined efficacy parameters in 227 hypogonadal men. In the T gel groups, the T dose was adjusted up or down to 75 mg/day (contained in 7.5 g gel) on day 90 if serum T concentrations were below or above the normal male range. No dose adjustment was made with the T patch group. Sexual function and mood changes were monitored by questionnaire, body composition was determined by dual energy x-ray absorptiometry, and muscle strength was measured by the one repetitive maximum technique on bench and leg press exercises. Sexual function and mood improved maximally on day 30 of treatment, without differences across groups, and showed no further improvement with continuation of treatment. Mean muscle strength in the leg press exercise increased by 11 to 13 kg in all treatment groups by 90 days and did not improve further at 180 days of treatment. Moderate increases were also observed in arm/chest muscle strength. At 90 days of treatment, lean body mass increased more in the 100 mg/day T gel group (2.74 +/- 0.28 kg; P = 0.0002) than in the 50 mg/day T gel (1.28 +/- 0.32 kg) and T patch groups (1.20 +/- 0.26 kg). Fat mass and percent fat were not significantly decreased in the T patch group, but showed decreases in the T gel groups (50 mg/day, -0.90 +/- 0.32 kg; 100 mg/day, - 1.05 +/- 0.22 kg). The increase in lean mass and the decrease in fat mass were correlated with the changes in average serum T levels attained after transdermal T replacement. These beneficial effects of T replacement were accompanied by the anticipated increases in hematocrit and hemoglobin but without significant changes in the lipid profile. The increase in mean serum prostate-specific antigen levels (within the normal range) was correlated with serum levels of T. The greatest increases were noted in the 100 mg/day T gel group. Skin irritation was reported in 5.5% of subjects treated with T gel and in 66% of subjects in the permeation-enhanced T patch group. We conclude that T gel replacement improved sexual function and mood, increased lean mass and muscle strength (principally in the legs), and decreased fat mass in hypogonadal men with less skin irritation and discontinuation compared with the recommended dose of the permeation-enhanced T patch.