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To create an evidence-based position statement regarding the role of exogenous testosterone in postmenopausal women.The North American Menopause Society (NAMS) enlisted a panel of clinicians and researchers acknowledged to be experts in the field of testosterone therapy to review the evidence obtained from the medical literature, compile supporting statements and conclusions, and reach consensus on recommendations. The document was reviewed and approved by the NAMS Board of Trustees.Endogenous testosterone levels have not been clearly linked to sexual function in postmenopausal women. Published evidence from randomized controlled trials, although limited, indicates that exogenous testosterone, both oral and nonoral formulations, has a positive effect on sexual function, primarily desire, arousal, and orgasmic response, in women after spontaneous or surgically induced menopause. Data are inadequate to support recommending testosterone use for any other indication, including preserving or increasing bone mineral density, reducing hot flashes, increasing lean body mass, or improving well-being. Hirsutism and acne have been associated with testosterone therapy, but the actual risks are not well defined. It is not known whether testosterone therapy increases the risk of breast cancer, cardiovascular disease, or thromboembolic events. There are few data regarding the safety and efficacy of testosterone therapy in women not using concomitant estrogen therapy or for the use of testosterone therapy for longer than 6 months. Clinically available laboratory assays do not accurately detect testosterone concentrations at the values typically found in women, and no testosterone level has been clearly linked to a clinical syndrome of hypoandrogenism or testosterone insufficiency.Postmenopausal women with decreased sexual desire associated with personal distress and with no other identifiable cause may be candidates for testosterone therapy. Testosterone treatment without concomitant estrogen therapy cannot be recommended because of a lack of evidence. When evaluating a woman for testosterone therapy, recommendations are to rule out causes not related to testosterone levels (eg, physical and psychosocial factors, medications) and to ensure that there is a physiologic cause for reduced testosterone levels (eg, bilateral oophorectomy). Laboratory testing of testosterone levels should be used only to monitor for supraphysiologic levels before and during therapy, not to diagnose testosterone insufficiency. Monitoring should also include subjective assessments of sexual response, desire, and satisfaction as well as evaluation for potential adverse effects. Transdermal patches and topical gels or creams are preferred over oral products because of first-pass hepatic effects documented with oral formulations. Custom-compounded products should be used with caution because the dosing may be more inconsistent than it is with government-approved products. Testosterone products formulated specifically for men have a risk of excessive dosing, although some clinicians use lower doses of these products in women. Testosterone therapy is contraindicated in women with breast or uterine cancer or in those with cardiovascular or liver disease. It should be administered at the lowest dose for the shortest time that meets treatment goals. Counseling regarding the potential risks and benefits should be provided before initiating therapy.