The effects of severe energy restriction alone (2.0 MJ/d for 4 wk and subsequently 3.5 MJ/d for 4 wk) or energy restriction plus moderate exercise on energy balance were studied in 20 healthy obese women. Subjects aged 25-50 y were matched on the basis of body mass index and percentage body fat and randomly assigned to diet alone (D) or diet and exercise (DE) for 8 wk. DE resulted in a significantly increased loss of fat mass compared with D (7.8 +/- 0.8 compared with 5.5 +/- 0.8 kg; P < 0.05). The average daily metabolic rate measured with doubly labeled water decreased with both treatments, with no differences between the treatments. Energy balance data show that the DE treatment resulted in a significantly greater energy deficit than the D treatment. The relative contribution of fat to energy expenditure during exercise was significantly enhanced by DE treatment whereas it did not change after D. The energy expended on physical activity was not changed at the end of both treatments, with no differences between the two groups. The unchanged energy expended on physical activity indicates that DE might be accompanied by partial compensation of daily physical activities outside the training for the energy expended during the training. The energy deficit due to energy restriction alone was not compensated by a decrease in free-living daily physical activities. Addition of moderate exercise to an energy-restriction program in obese women has advantages with respect to changes in body composition, energy expenditure, and substrate utilization.