BACKGROUND: The ovaries provide approximately half the circulating testosterone in premenopausal women. After bilateral oophorectomy, many women report impaired sexual functioning despite estrogen replacement. We evaluated the effects of transdermal testosterone in women who had impaired sexual function after surgically induced menopause. METHODS: Seventy-five women, 31 to 56 years old, who had undergone oophorectomy and hysterectomy received conjugated equine estrogens (at least 0.625 mg per day orally) and, in random order, placebo, 150 microg of testosterone, and 300 microg of testosterone per day transdermally for 12 weeks each. Outcome measures included scores on the Brief Index of Sexual Functioning for Women, the Psychological General Well-Being Index, and a sexual-function diary completed over the telephone. RESULTS: The mean (+/-SD) serum free testosterone concentration increased from 1.2+/-0.8 pg per milliliter (4.2+/-2.8 pmol per liter) during placebo treatment to 3.9+/-2.4 pg per milliliter (13.5+/-8.3 pmol per liter) and 5.9+/-4.8 pg per milliliter (20.5+/-16.6 pmol per liter) during treatment with 150 and 300 microg of testosterone per day, respectively (normal range, 1.3 to 6.8 pg per milliliter [4.5 to 23.6 pmol per liter]). Despite an appreciable placebo response, the higher testosterone dose resulted in further increases in scores for frequency of sexual activity and pleasure-orgasm in the Brief index of Sexual Functioning for Women (P=0.03 for both comparisons with placebo). At the higher dose the percentages of women who had sexual fantasies, masturbated, or engaged in sexual intercourse at least once a week increased two to three times from base line. The positive-well-being, depressed-mood, and composite scores of the Psychological General Well-Being Index also improved at the higher dose (P=0.04, P=0.03, and P=0.04, respectively, for the comparison with placebo), but the scores on the telephone-based diary did not increase significantly. CONCLUSIONS: In women who have undergone oophorectomy and hysterectomy, transdermal testosterone improves sexual function and psychological well-being.