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Background Both hypogonadism and obesity are common in older men which additively exacerbate their age-related decline in physical function resulting in frailty. However, the appropriate treatment approach for frail, older men with hypogonadism and obesity is still controversial. Methods In this randomized, comparative efficacy, double-blinded, placebo-controlled (for testosterone) trial, we examined the effect of 6-months: 1) lifestyle therapy (diet-induced weight loss and supervised aerobic and resistance exercise training) + testosterone replacement therapy (LT+Test) vs. 2) lifestyle therapy + placebo (LT+Pbo) in 83 older (age≥65 years) male veterans with obesity (BMI≥30 kg/m2) and evidence of persistently low AM serum testosterone ( Results In the intention-to-treat analysis, the score in the PPT increased similarly in the LT+Test group and LT+Pbo (increase from baseline of 17% vs. 17%, respectively; P=0.78 for between-group comparison). Peak oxygen consumption (VO2peak) increased more in the LT+Test group than in the LT+Pbo group (increase of 23% vs. 16%, respectively; P=0.04). Moreover, despite equivalent weight loss between groups (both groups lost 9% of body weight from baseline), lean body mass decreased less in the LT+Test group than in LT+Pbo group (-1.8% vs. -3.5%, respectively; P=0.02). Likewise, bone mineral density at the total hip was relatively preserved in the LT+Test group compared to the LT+Pbo group (+0.5% vs. -1.1%; respectively; P Conclusions In older men with hypogonadism and obesity associated with frailty, testosterone replacement therapy significantly augments the increase in endurance capacity in response to lifestyle intervention with diet and regular exercise and helps to preserve muscle and bone mass during weight loss. However, testosterone replacement therapy does not lead to greater amelioration of frailty than in response to intensive lifestyle intervention alone in this population.