Testosterone and body fat are intimately related for us guys. Either one can strongly affect the other and even lead to a viscious cycle of increased weight gain and lowered testosterone.
Let's start with what happens when you put on extra body fat: you slowly begin to increase cortisol, lower testosterone and decrease human growth hormone. If you reach medical obesity, all three of these hormones are negatively impacted very significantly. 
Why does increased body weight lead to a reduction in testosterone levels? The reasons are many, but one of the most important is increased aromatization. Fat cells contain aromatase and as you increase weight your levels of this enzyme increase. Unfortunately, aromatase converts testosterone to estrogen (estradiol) and so the all important testosterone/estradiol ratio is shifted downward.
This creates a viscious cycle because the less testosterone you have, the easier it is to lose muscle and, since "muscle burns fat", weight gain comes much more easily, in turn leading to further losses in testosterone, etc. The loss in growth hormone and the increase in cortisol contribute to the same phenomenon.
In fact, cortisol will also create a similar viscious cycle, especially for those with an "apple shape", which most guys are. Studies show that abdominal fat, or visceral fat as it is called in the medical world, has much higher levels of cortisol.  Therefore, as you inflate that spare tire around your middle, more cortisol is created and cortisol will definitely reduce testosterone. Again, you can see the viscious cycle here: lowered testosterone will lead to an increase in overall body fat including abdominal and you have a very negative downward spiral going on.
Put this all together and it explains the reason that visceral fat and low testosterone are intimately and negatively related in the studies.  Either one can contribute to the other. And both are associated with increased risk of diabetes, cardiovascular disease and insulin resistance.  (See my link on Low Testosterone Symptoms as well.)
NOTE: Visceral fat is also linked to increased risk of cardiovascular disease and certain cancers as well.
So it is critical to get your testosterone tested regularly and keep your weight down. Read my links on How to Improve Your Testosterone Naturally for ideas as well.
1) Metabolism, Sep 1995, 44(Supplement 3):Pages 21-23 "Endocrine abnormalities of obesity"
2) Science, Dec 7 2001, 294(5549):2166-2170, "A Transgenic Model of Visceral Obesity and the Metabolic Syndrome"
3) Metabolism, Sep 1990, 39(9):897-901, "Visceral fat accumulation in men is positively associated with insulin, glucose, and C-peptide levels, but negatively with testosterone levels"
4) Obesity, 2006, 14:16S 19S, "Why Visceral Fat is Bad: Mechanisms of the Metabolic Syndrome"