Testosterone supplementation increases muscle mass primarily by inducing muscle fiber hypertrophy; however, the mechanisms by which testosterone exerts its anabolic effects on the muscle are poorly understood. The prevalent view is that testosterone improves net muscle protein balance by stimulating muscle protein synthesis, decreasing muscle protein degradation, and improving the reutilization of amino acids. However, the muscle protein synthesis hypothesis does not adequately explain testosterone-induced changes in fat mass, myonuclear number, and satellite cell number. We postulate that testosterone promotes the commitment of pluripotent stem cells into the myogenic lineage and inhibits their differentiation into the adipogenic lineage. The hypothesis that the primary site of androgen action is the pluripotent stem cell provides a unifying explanation for the observed reciprocal effects of testosterone on muscle and fat mass.