Our intention was to examine if subnormal testosterone levels in older men were associated with a reduction in quality of life and physical and mental health, and secondly to examine if testosterone treatment could improve these conditions. We performed a nested case-control study and a 1-year testosterone intervention study. Men with subnormal testosterone had significantly higher weight, fat mass and abdominal adipose tissue. They also had significantly higher glucose and insulin levels, and they had higher triglyceride levels. Testosterone treatment had a large impact on body composition with reduced fat mass and abdominal adipose tissue and increased fat-free mass, but it did not affect weight and glucose and lipid metabolism. Bone mineral density in the hip was significantly higher after the testosterone treatment. Older men with subnormal testosterone levels had an unfavorable metabolic profile. Testosterone treatment improved body composition, but it did not reverse the unfavorable metabolic profile.