Testosterone supplementation increases skeletal muscle mass and decreases fat mass; however, the underlying mechanisms are unknown. We hypothesized that testosterone regulates body composition by promoting the commitment of mesenchymal pluripotent cells into myogenic lineage and inhibiting their differentiation into adipogenic lineage. Mouse C3H 10T1/2 pluripotent cells were treated with testosterone (0-300 nM) or dihydrotestosterone (DHT, 0-30 nM) for 0-14 d, and myogenic conversion was evaluated by immunocytochemical staining for early (MyoD) and late (myosin heavy chain II; MHC) myogenic markers and by measurements of MyoD and MHC mRNA and protein. Adipogenic differentiation was assessed by adipocyte counting and by measurements of peroxisomal proliferator-activated receptor gamma 2 (PPAR gamma 2) mRNA and PPAR gamma 2 protein and CCAAT/enhancer binding protein alpha. The number of MyoD+ myogenic cells and MHC+ myotubes and MyoD and MHC mRNA and protein levels increased dose dependently in response to testosterone and DHT treatment. Both testosterone and DHT decreased the number of adipocytes and down-regulated the expression of PPAR gamma 2 mRNA and PPAR gamma 2 protein and CCAAT/enhancer binding protein alpha. Androgen receptor mRNA and protein levels were low at baseline but increased after testosterone or DHT treatment. The effects of testosterone and DHT on myogenesis and adipogenesis were blocked by bicalutamide. Therefore, testosterone and DHT regulate lineage determination in mesenchymal pluripotent cells by promoting their commitment to the myogenic lineage and inhibiting their differentiation into the adipogenic lineage through an androgen receptor-mediated pathway. The observation that differentiation of pluripotent cells is androgen dependent provides a unifying explanation for the reciprocal effects of androgens on muscle and fat mass in men.