There are a lot of questions surrounding weight loss and testosterone. On this page we are going to cover a lot of very important ground, so be ready! Here are the basic topics that we are going to deal with below:
I. Hypogonadal testosterone levels caused by being very overweight or being obese
II. How weight loss can double testosterone levels
III. How rapid weight loss and intense exercise can destroy - yes, destroy - your testosterone levels
IV. How TRT (Testosterone Replacement Therapy) can help with wight loss
Of course, if you are only interested in one of these topics, skip ahead to the pertinent section.
One study on severely obese men found that their average testosterone was 223 ng/dl.  That hurts just to think about it! This is VERY low testosterone and will often lead to many of the classic low testosterone symptoms: low libido, erectile dysfunction, loss of morning erections, fatigue, depression, osteoporosis, anemia, hardening of the arteries, etc. They then compared these men to age-matched controls, whose average testosterone was 599 ng/dl, and found that the difference was 268%! What happens is that profound weight gain halts testosterone signaling from the hypothalamus. Basically, your hypothalamus gets fooled into thinking that you have a lot of testosterone - due to the fact that your estradiol is so high - and GnRH drops like a rock. So, ironically, your testes are ready to go and able to pump out testosterone, but there's nothing there to flip on the switch!
How does your hypothalamus get fooled? The reason is that as you gain weight, your aromatase levels increase dramatically and this extra aromatase converts your testosterone into estradiol, the "bad estrogen." This leads to ever-increasing levels of free estradiol to free testosterone and, when this ratio goes high enough, it shuts down the hypothalamus output as mentioned above.  And, again, as we'll show below, the low testosterone levels will also make it MUCH more difficult to maintain one's weight, creating a viscious circle of testosterone loss and weight gain.
It should be noted that this does not just apply to the morbidly obese. One study of men with significant visceral fat showed that dropping about 35 pounds led to a 15 percent increase in free testosterone.  Other research showed that losing between 57 and 283 pounds produced even more significant changes in testosterone: average total testosterone levels went 240 to 377 ng/dl, a sizeable 58% rise on average. Free testosterone also increased by 41%.  Again, the men who lost the most amount of weight probably doubled their testosterone levels.
This is why on the Peak Testosterone Forum I always try to ask men with low testosterone how overweight they are. I am not trying to get personal, but feel that it is important to let them know that weight loss can very significantly boost their T in most cases. And it will also lower estradiol which will very favorably alter their all-important testosterone-to-estradiol ratio. I discuss this and other strategies in my page on How to Improve Your Testosterone-to-Estrogen (Estradiol) Ratio.
Have I seen this in real life? One of our longest term posters reported:
"I have a friend who weighed 238 pounds, his testosterone fluctuated between 439-500 Ng/dl. Once he spent a few years reducing his weight to 170, changing his diet, exercising, getting hydrated, his testosterone went back up to the 750-800 ng/dl range." 
If being overweight can make you hypogonadal and weight loss can double or more your testosterone (in some cases), then obviously you want to lose weight as rapidly as possible, right? And you probably want to add in some intense exercise to accelerate the process even more, correct? Wrong! That might seem logical, but nothing could be further from the truth unless perhaps you are a man not on TRT (testosterone replacement therapy).
This was shown powerfully in a study that I documented in my page on A Protocol to Lose Weight Rapidly and Maintain Muscle. The participants in this study did something remarkable: they combined a wide variety of intense exercises with a 40% reduction in calories and lost 11 pounds and either maintained or even gained some muscle. This is not an easy thing to do and so I did a page on that.
However, one of the guys on the Peak Testosterone Forum read the fine print and noticed that the testosterone levels of the men in the study dropped from 507 to 126 ng/dl! That is an ugly fall in testosterone and left those men severely hypogonadal.
Okay, so we know that gaining weight can lower testosterone. What about going the "other direction?" If you add (external or exogenous) testosterone, will you lower body fat? It turns out that many studies say 'yes', especially if you are hypogonadal. Let's check out a few examples:
1. Hypogonadal Males. One study found that giving hypogonadal males testosterone enanthate, which is very similar to the cypionate that is used in the U.S., resulted in a loss of 13% subcutaneous fat.  Remember: participants were not put on any type of an exercise program but rather just lost weight - somewhat miraculously - from the HRT itself. Yes, that's the Power of T!
2. Middle-aged Obese Males. Giving HRT to middle-aged, obese males lowered visceral fat but not subcutaneous fat in study.  Visceral fat is "belly (or stomach) fat" and is deadly. It is commonly associated with insulin resistance and MetS (Metabolic Syndrome). Of course, obese males will very likely be low or lowish in testosterone and may even be hypogonadal.
Another study showed that weight loss (with testosterone undecanoate) may be more pronounced on the obese and found that "More than half of the men (53%) lost at least 33 lbs., and almost a third lost 44 lbs. or more weight. Similarly, 86% of the men had a least a 2-inch reduction in waist circumference and 46% dropped 6 inches or more." These are impressive numbers and what was really remarkable is that the men kept losing weight generally all the way through the five year point. This is the opposite of what usually happens with dieting where the typical guys' weight yo yo's back and forth. 
3. Prostate Cancer Patients. As you may know, prostate cancer patients are often given anti-androgen pharmaceuticals and in one study this lowered patient testosterone levels by almost 80%. As might be expected, weight increased by 1.8% after 12 months and the percent fat mass increased by 11% after about 12 months.
4. Steroid Users. One study noted that lean body mass increased in a somewhat dose dependent manner with men on HRT gainng a little Lean Body Mass and those on steroids gaining still more. As you know, steroid users go "supraphysiological," i.e. beyond the typical max values experienced by a young male (~1200 ng/dl). Thus, researchers could look at values even well beyond 1200 and see that HRT made a difference. (Steroids can also shut off your testosterone completely if done incorrectly.)
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If you look at the cases above, particularly #1 and #2, you see that testosterone works very well for the special cases where men are likely deficient in testosterone. But what about in normal, health males? Well, one study looked at this and found that, even though total testosterone was only increased by 30%, visceral fat accumulation was fought off in healthy senior males.  So testosterone therapy will likely improve outcomes for almost any man.
Now I do want to issue a caution here: I have heard that some of the HRT clinics are putting out ridiculous ads where they claim that testosterone will melt the pounds off of you like lipo. This is simply not the case. The studies (overall) show that testosterone therapy results in mild weight loss and is an aid in management of the same. The big guns are always diet and exercise and, I would argue, sleep.
What about your erectile strength? Can weight loss improve that as well. Of course, anything that boosts your testosterone and testosterone-to-estradiol ratio is likely to help improve your bedroom performance. But weight loss goes way beyond just improving your hormones. For every pound lost, you drop a point in cholesterol for example.
A similar drop in C-Reactive protein - a standard measure whole body inflammation - occurs with each pound lost as well. This drop in inflammation is very important, because "circulating CRP levels were significantly higher in obese men with erectile dysfunction as compared with obese men without erectile dysfunction."  Arterial inflammation can lead to endothelial dysfunction and arteriosclerosis, both of which can lead to erection problems in the short and long term, respectively. For more information see my page on Weight Loss and Erectile Dysfunction.
1) Total testosterone was improved as well.) [Diabetes, Obesity and Metabolism, May 2004, 6(3):208 215, "Changes in sex hormone-binding globulin and testosterone during weight loss and weight maintenance in abdominally obese men with the metabolic syndrome"
2) The Journal of Clinical Endocrinology & Metabolism, May 1 1988, 66(5):1019-1023, "Effect of Massive Weight Loss on Hypothalamic Pituitary-Gonadal Function in Obese Men"
3) The Journal of Clinical Endocrinology & Metabolism, Dec 1 1977, 45(6):1211-1219, "Low Serum Testosterone and Sex-Hormone-Binding-Globulin in Massively Obese Men"
4) Medical Hypotheses, April 1998, 50(4):331-333, "The role of estradiol in the maintenance of secondary hypogonadism in males in erectile dysfunction"][International Journal of Impotence Research, 2003, 15:38 43, "Oestrogen-mediated hormonal imbalance precipitates erectile dysfunction"
5) Med Hypotheses, 1998 Apr, 50(4):331-3, "The role of estradiol in the maintenance of secondary hypogonadism in males in erectile dysfunction"
6) Journal of Clirncal Endocrinology and Metabolism, 81(12), "Increase in Bone Density and Lean Body Mass during Testosterone Administration in Men with Acquired Hypogonadism"
7) International Journal of Obesity and Related Metabolic Disorders, 1992, 16(12):991-997], "The effects of testosterone treatment on body composition and metabolism in middle-aged obese men"
8) Journal of Endocrinological Investigation, 2004, 27(7):665-669, "Erectile dysfunction associates with endothelial dysfunction and raised proinflammatory cytokine levels in obese men"
10) The Journal of Clinical Endocrinology & Metabolism January 1, 2008 vol. 93 no. 1 139-146, "Testosterone Therapy Prevents Gain in Visceral Adipose Tissue and Loss of Skeletal Muscle in Nonobese Aging M"