The assessment and then treatment of a change in libido, or a change in the desire to partake in sexual activity, during the menopausal transition and beyond has been a challenging and elusive area of clinical research. This is partly due to the multidimensional nature of female sexuality, the difficulties of measuring testosterone in women in a reliable and accurate manner, and the complexity of the neurobiology and neurobehavior of female sexual desire. In addition, there is a lack of evidence for diagnostic specificity of low free testosterone levels for the symptom of low libido in women for whom there are no confounding interpersonal or psychological factors; although, in the symptomatic population of surgically or naturally menopausal women, a low level of free testosterone often accompanies a complaint of reduced desire/libido. The randomized clinical trial research on testosterone replacement for naturally and/or surgically menopausal women with sexual dysfunction has been criticized for a high placebo response rate, supraphysiological replacement levels of testosterone, the perception of modest clinical outcome when measuring objective data such as the frequency of sexual intercourse relative to placebo, and the unknown safety of long-term testosterone replacement in the estrogen-replete surgically or naturally menopausal woman. A careful review of current evidence from randomized, controlled trials lends support to the value of the replacement of testosterone in the estrogen-replete menopausal woman for whom libido and desire has declined. The issue of long-term safety remains to be answered.