Sarcopenia and cachexia present characteristic features of a decrease in skeletal muscle mass and strength, anorexia, and lack of motivation. Treatments for these diseases have not yet been established, although selective androgen receptor modulators (SARMs) are considered as therapeutic targets. We previously reported that a novel SARM compound, SARM-2f, exhibits anabolic effect on muscles, with less stimulatory effect on prostate weight compared with testosterone, in rat Hershberger assays and cancer cachexia models. In this study, we studied the mechanism of action for SARM-2f selectivity and also assessed whether the muscle increase by this compound might lead to improvement of muscle function and physical activity. First, we examined the tissue distribution of SARM-2f. Tissue concentration was 1.2-, 1.6-, and 1.9-fold as high as the plasma concentration in the levator ani muscle, brain, and prostate, respectively. This result showed that the tissue-selective pharmacological effect did not depend on SARM-2f concentration in the tissues. The ability of SARM-2f to influence androgen receptor (AR)-mediated transcriptional activation was examined by reporter assays using human normal prostate epithelial cells (PrEC) and skeletal muscle cells (SKMC). SARM-2f exerted higher activity against AR in SKMC than in PrEC. Mammalian two hybrid assays showed different co-factor recruitment patterns between SARM-2f and dihydrotestosterone. Next, we studied the effect of SARM-2f on motivation and physical functions such as sexual behavior and motor activities in castrated rat or mouse models. SARM-2f restored the sexual behavior that was lost by castration in male rats. SARM-2f also increased voluntary running distance and locomotor activities. These results suggest that tissue-specific AR regulation by SARM-2f, but not tissue distribution, might account for its tissue specific androgenic effect, and that the muscle mass increase by SARM-2f leads to improvement of physical function. Together, these findings suggest that SARM-2f might represent an effective treatment for sarcopenia and cachexia.