OBJECTIVE To determine whether testosterone therapy improves glucose metabolism in men with type 2 diabetes (T2D) and lowered testosterone. RESEARCH DESIGN AND METHODS We conducted a randomized, double-blind, parallel, placebo-controlled trial in 88 men with T2D, aged 35–70 years with an HbA1c ≤8.5% (69 mmol/mol), and a total testosterone level, measured by immunoassay, of ≤12.0 nmol/L (346 ng/dL). Participants were randomly assigned to 40 weeks of intramuscular testosterone undecanoate (n = 45) or matching placebo (n = 43). All study subjects were included in the primary analysis. Seven men assigned to testosterone and six men receiving placebo did not complete the study. Main outcome measures were insulin resistance by homeostatic model assessment (HOMA-IR, primary outcome) and glycemic control by HbA1c (secondary outcome). RESULTS Testosterone therapy did not improve insulin resistance (mean adjusted difference [MAD] for HOMA-IR compared with placebo −0.08 [95% CI −0.31 to 0.47; P = 0.23]) or glycemic control (MAD HbA1c 0.36% [0.0–0.7]; P = 0.05), despite a decrease in fat mass (MAD −2.38 kg [−3.10 to −1.66]; P < 0.001) and an increase in lean mass (MAD 2.08 kg [1.52–2.64]; P < 0.001). Testosterone therapy reduced subcutaneous (MAD −320 cm3 [−477 to −163]; P < 0.001) but not visceral abdominal adipose tissue (MAD 140 cm3 [−89 to 369]; P = 0.90). CONCLUSIONS Testosterone therapy does not improve glucose metabolism or visceral adiposity in obese men with moderately controlled T2D and modest reductions in circulating testosterone levels typical for men with T2D.