Testosterone deficiency is highly prevalent in up to 50% of men with the metabolic syndrome and type 2 diabetes mellitus. Low testosterone levels in men appear to be an independent cardiovascular risk factor and predictor of subsequent development of the metabolic syndrome. Reciprocally, the metabolic syndrome leads to a decrease in testosterone levels. This review provides an account of the pathophysiological mechanisms in the bidirectional relationship between hypogonadism and body composition, inflammation and insulin sensitivity as well as the effects of testosterone replacement on diverse metabolic parameters.