Androgen supplementation in women has received enormous attention in the scientific and lay communities. That it enhances some aspects of cognitive function, sexual function, muscle mass, strength, and sense of well-being is not in question. What is not known is whether physiological testosterone replacement can improve health-related outcome in older women without its virilizing side effects. Although it is assumed that the testosterone dose-response relationship is different in women than in men and that clinically relevant outcomes on the above-mentioned effects can be achieved at lower testosterone doses, these assumptions have not been tested rigorously. Androgen deficiency has no clear-cut definition. Clinical features may include impaired sexual function, low energy, depression, and a total testosterone level of less than 15 ng/dL, the lower end of the normal range. Measurement of free testosterone is ideal, because it provides a better estimate of the biologically relevant fraction. It is not widely used in clinical practice, because some methods of measuring free testosterone assay are hampered by methodological difficulties. In marked contrast to the abrupt decline in estrogen and progesterone production at menopause, serum testosterone is lower in older women than in menstruating women, with the decline becoming apparent a decade before menopause. This article reviews testosterone's effects on sexual function, cognitive function, muscle mass, body composition, and immune function in postmenopausal women.