Men with the metabolic syndrome (MetS) and type 2 diabetes (T2D) often have low testosterone levels. Elevating low testosterone levels may improve features of the MetS and glycemic control. In a single blind, 52-week randomized clinical trial, the effects of supervised diet and exercise (D&E) with or without transdermal testosterone administration on components of the MetS in hypogonadal men with the MetS and newly diagnosed T2D were assessed. A total of 32 hypogonadal men (total testosterone <12.0 nmol/L) with newly diagnosed T2D and with the MetS as defined by the Adult Treatment Panel III and the International Diabetes Federation received supervised D&E, but 16 received it in combination with testosterone gel (50 mg) once daily (n = 16). No glucose-lowering agents were administered prior to or during the study period. Outcome measures were components of the MetS as defined by the Adult Treatment Panel III and the International Diabetes Federation. Serum testosterone, glycosylated hemoglobin (HbA(1c)), fasting plasma glucose, high-density lipoprotein cholesterol, triglyceride concentrations, and the waist circumference improved in both treatment groups after 52 weeks of treatment. Addition of testosterone significantly further improved these measures compared with D&E alone. All D&E plus testosterone patients reached the HbA(1c) goal of less than 7.0%; 87.5% of them reached an HbA(1c) of less than 6.5%. Based on Adult Treatment Panel III guidelines, 81.3% of the patients randomized to D&E plus testosterone no longer matched the criteria of the MetS, whereas 31.3% of the D&E alone participants did. Additionally, testosterone treatment improved insulin sensitivity, adiponectin, and high-sensitivity C-reactive protein. Addition of testosterone to supervised D&E results in greater therapeutic improvements of glycemic control and reverses the MetS after 52 weeks of treatment in hypogonadal patients with the MetS and newly diagnosed T2D.