At replacement doses, testosterone produces only modest increases in muscle strength and bone mineral density in older hypogonadal men. While higher doses of testosterone are more anabolic, there is concern over increased adverse effects, notably prostate enlargement. We tested a novel strategy for obtaining robust anabolic effects without prostate enlargement. Orchiectomized (ORX) male rats were treated for 56 days with 1.0 mg testosterone/day, with and without 0.75 mg/day of the 5-reductase inhibitor MK-434. Testosterone administration elevated the prostate dihydrotestosterone (DHT) concentration and caused prostate enlargement. Both effects were inhibited by MK-434. ORX produced a catabolic state, manifest in reduced food intake, blunted weight gain, reduced hemoglobin concentration, decreased kidney mass, increased bone resorption, and in the proximal tibia there was both decreased cancellous bone volume and a decreased number of trabeculae. In soleus and extensor digitorum longus muscles, ORX reduced both the percentage of type I muscle fibers and the cross-sectional area of type 1 and 2 fibers. Testosterone administration caused a number of anabolic effects, including increases in food intake, hemoglobin concentration, and grip strength, and reversed the catabolic effects of ORX on bone. Testosterone administration also partially reversed ORX-induced changes in muscle fibers. In contrast to the prostate effects of testosterone, the effects on muscle, bone and hemoglobin concentration were not blocked by MK-434. Our study demonstrates that the effects of testosterone on muscle and bone can be separated from the prostate effects and provides a testable strategy for combating sarcopenia and osteopenia in older hypogonadal men.