Transdermal testosterone (T) delivery represents an effective alternative to injectable androgens. We studied 163 hypogonadal men who applied 5, 7.5, or 10 g AndroGel (T gel) 1% CIII per day for up to 42 months. Efficacy data were presented in 123 subjects considered evaluable. Continuous AndroGel treatment normalized mean serum T and free T levels. Mean serum 5α-dihydrotestosterone concentrations and 5α-dihydrotestosterone/T ratio slightly increased, mean serum estradiol/T ratio doubled, and mean serum FSH and LH levels were suppressed by T replacement. Sexual function and mood parameters improved rapidly and were maintained throughout T treatment. Lean body mass increased (P = 0.0001) and fat mass decreased (P = 0.0001), and these changes were maintained with treatment but were not accompanied by significant increases in muscle strength. Increases in serum bone markers suggestive of increased bone formation were followed by gradual and progressive increases in bone mineral density more in the spine (P = 0.0001) than the hip (P = 0.0004). Mild local skin irritation occurred in 12 subjects, resulting in discontinuation in only one subject. Except for the anticipated increase in hematocrit and hemoglobin, there were no clinically significant changes in blood counts or biochemistry. In three subjects with elevated serum prostate-specific antigen, prostate biopsies showed cancer. We conclude that continued application of AndroGel resulted in beneficial effects similar to those with injectables and other transdermal preparations. This study was neither placebo controlled nor powered to determine the effects of T treatment on prostate cancer risk. Thus, monitoring for prostatic disease and assessment for erythrocytosis are strongly advised to reduce the risk of adverse events with T treatment of hypogonadal men.